It swings in a clumsy manner, no combos and eats your life away...

Only enemies can use it and only vampires, at that. I think it steals some life from enemies that are living and with flesh, but i couldn't test the theory, since it is very slow and exactly as you said, clumsy, too... You can't use it right under any circumstances, with any character. Unlike the vampire shield. But that breaks easily and has low endurance...

It would be nice if you could somehow use vampire sword and vampire shield together (not to be confused with queen's sword and vampiric attack).

Vampire shield also give you more health if you manage to block enemy attacks successfully. It isn't much use though since it breaks quite easily.

Yeah, I don't think it was ever really meant to be used by the player, more there as a sort of easter egg type thing for finding that armory that it's in.