Bloody Nightmare's nightmare (a)

Why wouldn't he know of the extent and capabilities of the items produced by the weaponsmiths of the spirit world?

He knew how great they were because he had experienced one by himself!

His enemy, the manager of the first trial, was the fruit of their knowledge and resources, and he sincerely admits that it was truly marvelous! It came with a soul, after all.

It was able to act for itself, and that characteristic alone far surpassed the computerized creations of humans, which follow a set of codes.

Soul; a field of extensive study containing boundless truth and the path towards ascension that the magicians haven't tapped into yet.

That he knew was just because of the cultural and geographical differences between humans and spirits. They were born in a world where every being could gain a soul after living for some time, a far cry from Earth and Xavier.