A reply like that begs the question of how much he knows. Later, though. The kid asked him something, after all. Providing a proper answer to the question comes first. The sword gets raised to give Toushirou a better view and Karl himself glances down at it.

"Somewhat. It does possess an odd warmth to it but produces no actual flame." If Karl did indeed remember everything about the sword then it wouldn't. Has some fire property or something of the sort, but not actually capable of lighting things on fire. Good thing, too, or else a nice, sword shaped hole might have formed in his car's trunk.