Daemons, much as they enjoy being in the physical world, much prefer being in the physical world and free. However, some of the very much weaker daemon weapons have residents that really just couldn't care less. For example, in the Black Crusade books there's a chainsword with a Nurgling inside it. The only real contribution that the little guy makes is drooling constantly and occasionally revving without any incentive. Don't think he really cares about getting out either.
However, this is the exception as almost all other daemons will rail and fight against any attempts to be imprisoned. It's not a one-way ticket into the material realm, it's a one-way ticket to submission and slavery by something that literally wields you as a weapon. Do you want to get spend a millenia getting your head slapped against things? Daemons neither.

I like the DoT that gets more intense with each chop. I'd also like something along the lines of an armor eater, decaying enemy armor with every swing so you and your mates do more damage.
Far as negatives go, I'm not too sure about 100% friendly fire, I mean that is a powerful tool in the hands of a griefer. Like, exceedingly powerful, especially since it's also applying debuffs. I mean, he doesn't even have to kill you, run around in the rear lines distributing whatever debuffs it has to his people. Nasty griefer tool.
I figure there will be other things in the Nurgle tree that detract from your movement speed, no need to stack on top of it with a Daemon Weapon, and if they don't stack then what is even the point?
I like the idea of the constant AoE damage though. That really, really enforces the quarantine idea. Champions of Nurgle that have earned the rights to a daemon weapon will have to move with other Nurgle soldiers for fear of damaging other, less hearty brothers before combat even begins. This sounds perfect to me.

I'd think it would be a fun idea for this:
Since daemon weapons are so rare, perhaps make it an event when one is unearthed, and have it somewhere in chaos territory. Then, when within a certain area, it could turn on full team killing to display just how far the followers of chaos are willing to go to get a daemon weapon of their own, or perhaps if there is a guild system, it would be inter-guild battles, like warbands attacking each other for the daemon weapon. It could be like capture point that you have to hold for X amount of time, at which point the guild/person who wins it get to decide who receives the weapon. If loyalist/eldar forces manage to get tot he point and hold it, it could be destroyed by them which would remove the daemon weapon for good, denying it to chaos forces.

I just thinks something like this could show how much backstabbing goes on in chaos, as well as just how powerful a daemon weapon is on the battlefield.

I wouldn't like anything that promotes outright Team Killing, especially since we're going to have a punishment mechanic. Even turning it off for the event is a bad idea because then that one asshole can go around shooting people willy nilly for freebies. This is sort of reigned in by the Warband idea but not entirely.
Then there's the issue that for the time that we're all squabbling over the Daemon Weapon we'll be so wide open to attack that it will physically hurt me. With all the of the Strikeforces that are worth a damn squabbling over the weapon we could be under serious risk of losing a LOT of territory as enemy forces capitalize on a faction-wide weakness.

Well, why not have it something like this then: Perhaps they could have the daemon weapon placed in a tri/quad territory (Where all 4 faction's territorys meet, or just 3 of them) so it would get a lot of members heading over there, while still keeping our territory. If it's captured, it could give the faction that captures it a nice boost to those who participated possibly, but I still think the strikeforces being allowed to temporarily kill each other would be a good idea if only to show that chaos is chaotic. We don't hold any love for loyalists, xenos, or even each other. We'd kill each other over a cookie, if our lord wants that cookie.

but if Abbadon demands from you not to fight for that cookie?

Then there'd be a debate, which would involve fine wines, and a Jacuzzi of blood. After a long debate involving swords, magic, and murder, there'd be a conclusion that we won't fight.... Until after we kill the loyalists/eldar/orks, once that's done it's free game once more.

what I would like to see is there would be rare wild demons in chaos territory that players would slay
you would collect the souls of demons and sacrifice them to the god of your choice and be rewarded

I do like the idea of unique gear...that is to say, weapons or armour that have a single instance on an entire server. They wouldn't need to provide a game-breaking benefit in order to be desirable. I just think it would be cool to have, say, the master of the largest guild in a faction wield a recognizable weapon. That way you can pick them out as a target on the battlefield.

If daemon weapons worked like that, I'd be happy even if I never had the chance to use one. Just knowing that they're around would be enough.

Maybe not the largest faction, but perhaps the most effective.

Or, perhaps the 10 warlords, isn't that still a thing? Where the top 10 players are put into positions of power? Perhaps they get a weapon created for them, assuming that the whole fighting for the weapon thing wont happen.