DM's have absolute authority over Magic Items. Apply the natural reading.
Here's the key: the WoC editors were super-specific about spells and class features, because players are clever little maniacs who will scour the PHB looking for every advantage and synergy that they can. But MM and DMG content are written as guidelines for the omnipotent DM. DMs don't have to rules-lawyer and have no interest in min-maxing. So relax - the effect of the item is exactly what the DM says it is.
The spell descriptions in the PHB are generally very specific and call out every detail in well-defined game terms such as Bonus Action and Reach. If the editors had been as picky in the descriptions of the magic items, the DMG would have been as thick as a dictionary (and about as readable). The editors used natural language and omitted most of the niggling details. It's up to the DM to apply some common sense to get at the RAI.
In this case, the curse says that the character must attack until one or the other is at zero hp, or the character can't reach the other. Note that "attack" and "reach" aren't capitalized, as they would be in a spell description talking about Attack Actions and Reach. Here they have their common sense meaning - the character will approach the enemy and try to beat him with the cursed weapon until dead, and the only way to stop this short of death is to put the target beyond the character's reach (e.g. interposing a wall, levitating into the air, etc..). Merely forcing him away temporarily is not the same as putting him out of reach, as long as the character can still strive towards the goal.
There is ambiguity about how long the target has to be out of reach and to what extent the character will expend resources to get to the target. (e.g. would the character cast a Dispel Magic to get past a Wall of Force created by the target?) The DM should have some general idea about these questions before he puts the item into a treasure trove. Whatever the DM decides is the correct answer.