afaik we can't please everyone,
you have 2 options....
(note this is assuming you KNOW what the source of the item balace issue is)
you can either nerf/restrict/block such item or leave it be.
should the OP'ed weapon be left intact, just as Lee said, the neverending cycle of buffs will continue, eventually a group of people will whine about it, and possibly the mods
will release an even better weapon/armor to counteract such OP'ed item. by the looks of it we have reached a point where we are now in NEED of modded weapons to keep
a semi-balanced meta-game, modded weapons are nice and all but we have no idea of what consequences might arrive because of the mods,
I mean a few of them are ok, but too many might cause unwanted bugs. heck some of them are fun (like the broken Hylian shield that made forces into Gods of Death)
but eventually you'll find many people with dissapeared items, complaints about how broken stuff is etc...
long story short, keep scaling beyond the original damage output and you might risk game integrity (keyword here is might) both in the gameplay and metagame.
moving to option B
should the mods lock/nerf/restrict such OP'ed item, Would people be pissed? yes, Will people whine about it? absolutely, Will people threaten to or downright leave the game?
it's a rather realistic possibility,
at a first glance the nerf/restriction/lock of an items that is deemed too OP, might have these unsettling results as one of the biggest concerns for the community, yes I understand
this might be a big blow if handled poorly, but think about it for a second.... if handled right, you'd eventually use it as a reason to promote the use of other discarded or rarely used
items (mmo's afaik give you tons of items to mix-n-match builds for your liking) you'd also (once again if handled correctly) restore some balance to the metagame and quite possibly
avoid any more bugs from implementing new gear/items if you are "experimenting" on new items for the community.
where am I heading with this?
like I stated before, we can't possibly please anyone, and if you'd ask me I'd for for option B, why? putting them on a scale of pro's and con's I'd say option B is the lesser of the 2 evils
sure both options have nasty side effects but I believe Ultima could handle option B better on a worst-case scenario should it ever arise.
to whoever reads this, this is just me giving my 2 cents, should you find this offensive don't take it to heart, it's only an opinion.