As one man was charged with conspiring to behead a random person in Sydney's CBD, police removed a sword in an evidence bag from a Marsfield home.

But the owner of the menacing item has revealed that it is actually a plastic decoration common in almost every Shiite Muslim household.

Mustafa Dirani, a 21-year-old part-time painter, was detained and his parents' Marsfield home raided at dawn on September 18 as part of the Joint Counter-Terrorism Team's Operation Appleby.

He said he doesn't know Omarjan Azari, who was detained, along with two of Azari's brothers, when their Guildford home was raided on the same day.

Azari, 22, was charged with conspiring to commit a terrorist act after allegedly speaking to terrorist Mohammad Ali Baryalei via phone and taking orders to seize a random person from the city's streets and behead them.

Dirani was detained and later released without charge.

His parents' Marsfield home was searched for about eight hours and several items taken including computers, mobile phones and the sword.

The sword has an Arabic inscription on it that reads:لا فتى إلا علي لا سيف إلا ذو الفقار

It roughly translates to: "[There is] no hero but Ali; [there is] no sword but Zulfiqar".

The sword - a Zulfiqar or Dhu al-Fiqar - is one of the major symbols of Shiite Islam that one leader said "wouldn't be able to cut a cucumber".

Dirani's family are Afghan-born Shiite Muslims, however, the terrorist groups seeking to overthrow governments in Syria and Iraq are almost exclusively Sunni Muslim.

Dirani said his parents bought the plastic sword at a night market in Sydney. It has been on display in the family home for years.

He is still waiting for the police to return it.

The Australian Federal Police refused to explain why the sword was seized or to confirm that it was plastic.

"The AFP does not comment on ongoing investigations," a spokeswoman said.

Jamal Daoud, a prominent member of Sydney's Shiite community, said the sword would be found in almost every Shiite household as a decorative item either hanging on the wall or sitting in a drawer.

Sheikh Zaid Alsalami, leader of the Nabi Akram Islamic Centre in Granville, said many Shiite Muslims would also wear the sword as a pendant similar to Christians wearing a crucifix necklace.

"It basically denotes the sword that was carried by Imam Ali, the first Shia Imam," he said. "The Prophet handed Imam Ali this particular sword [in a battle]. It's not anything of any ritual value, it's just a reminder of something that represents the relation that Imam Ali had with the Prophet."

Another Shiite leader, who didn't wish to be named, said the sword is usually made from plastic, wood or blunt metal. It is bought from jewellery shops, religious shops and online.

"Sometimes it's made out of metal but you wouldn't be able to cut a cucumber with it," he said. "This item is not attached to any events overseas or anything like a war-style weapon."

Dirani said he had been living in fear since the September 18 raids and was too scared to go to the shops.

When Fairfax Media visited him at his Marsfield home, he was wearing tracksuit pants and a T-shirt, playing X-box with another person detained during the raids, Maywand Osman.

"Do we look like terrorists?" he asked. "It's ridiculous. I have never talked about carrying out a terrorist attack, I've never thought about it, it has never even crossed my mind."

The warrant from the Australian Federal Police still sits on a bookshelf in the family's duplex home.

It says: "Between 8 May 2014 and 17 September 2014 in the state of NSW and elsewhere, Mustafa Dirani did engage in other acts done in preparation for or planning terrorist acts contrary to Section 101.6 of the Criminal Code."

Dirani and Osman, who met at Epping Boys High School, had not come to the attention of counter-terrorism authorities before but have both had run-ins with the law.

Osman recently pleaded not guilty to charges arising from a car crash, in which he was allegedly chasing a group of men who had been bashed with bats, poles and a machete.

His passenger, Dirani, was given an eight-month suspended sentence for affray and concealing a serious indictable offence.

Media storm

In the wake of the raids, it was widely reported that AFP officers had confiscated a sword for forensic testing, with some stories picturing the ceremonial sword sealed inside a federal police evidence bag. In the context of an alleged plot to "behead" a random victim, ordered by one of the most senior Australians serving with Islamic State forces, Mohammad Ali Baryalei, the sword appeared to be a weapon.

The Daily Mail Australia linked it directly to the beheading plot under the headline: "Was this the lethal sword terror cell planned to use to behead an innocent victim on a Sydney street?"

The Daily Telegraph set the beheading plot claim beside the discovery of the sword.

Many articles by Fairfax Media described the sword as large and curved with a gold handle and engraved with Arabic writing. Police did not explain to the media at the time that the sword was plastic.

In the article "Sword taken from duplex", News Corp's Courier-Mail directly linked the object with the threat of beheadings:

"More than 1m long, the sword was carried from the home in a federal police evidence bag (right). Police believe its owner was one of at least 15 men plotting to kidnap an Australian from the streets and decapitate them."