From Sonic Retro

"Excalibur Sonic" holding Excalibur itself.

Possibly a "super transformation" (or at least very much like one) for Caliburn the Sword, Excalibur is the most powerful magical item within the Arthurian realm of Sonic and the Black Knight, formed by combining the strongest of the world's Sacred Swords: Sir Lancelot's Arondight, Sir Gawain's Galatine, Sir Percival's Laevatein, and Caliburn itself. Excalibur was guarded by Nimue before the events of the game.

Blade of Excalibur

Excalibur itself seems to have been divided into its constituent swords for most of Sonic and the Black Knight. But during the confrontation against Merlina in Dark Hollow, a broken Caliburn absorbed the Sacred Swords of the Knights of the Round Table to become the legendary weapon. The transformation simultaneously encases Sonic in a suit of gold armour, producing Excalibur Sonic. Excalibur has rubies in its hilt, and a glowing outer blade around Caliburn's physical blade. The weapon is used to battle the game's last boss, the Dark Queen.

Scabbard of Excalibur

An exceptionally powerful artefact in its own right, the Scabbard of Excalibur is essentially the cause of all Grand Kingdom's woes in the first part of Sonic and the Black Knight's storyline. Given to King Arthur (during his noble days) by Nimue, Lady of the Lake, the scabbard bestowed immortality upon its bearer - a great power which corrupted the once just and valiant ruler into a demon-summoning tyrant.

Sonic's quest across the kingdom, from Misty Lake to Faraway Avalon, sees him gathering the skills and knowledge necessary to counteract the power of the Scabbard and thus be able to slay King Arthur.

In the second half of the game, it is revealed that Merlina's plan all along was simply to take the Scabbard for herself, and use its magic to rewrite the future history of the Arthurian world, preserving Grand Kingdom forever. As Sonic uses the Blade to transform into Excalibur Sonic, Merlina uses the Scabbard to become the Dark Queen.