In Cursed Season 1 Episode 3, Nimue woke up at Yvoire Abbey with Arthur and the sword gone, and in Cursed Season 1 Episode 4, a Fey smuggler helped her go to Gramaire to get the sword back.
In the previous episodes of Netflix’s Cursed, the Red Paladins sacked Dewdenn, and Nimue escaped with a sword for Merlin.
Arthur lied about the sword, saying he’d received it as a reward for saving a girl from robbers.
Arthur had taken the sword from Nimue to gain Sir Ector’s sponsorship for the tournament.