As the hilt says, it's faction tied.

But, if you faction change with it in bags, does it turn to opposite factions quest starter?
Or does it go poof? / Turn to one gold coin? / Remain as it was, unusable to changed faction?

Was lucky enough to get one as drop, but my opposite faction char would benefit tons of more than the one it drop'd to. So it effy as it is currently.

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Q u o t e:
According to the Faction Change FAQ, if an item has an 'Alliance Equivalent" or a "Horde Equivalent" tag on its Armory page, it'll be changed when the player changes faction.

The battered hilt does have that tag.

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It will be converted.