After having already soulbound the Magistrate's Cudgel to Rekke and having succesfully upgraded it all the way, including the last upgrade, I found that upon unbinding the Cudgel and then binding it to a new character, I could not get the last upgrade to trigger again (the one where you rest at the Oathbinder's Sanctum).
Steps to make this happen:
* Soulbind the Magistrate's Cudgel to Rekke (or presumably any other character)
* Complete all upgrades
* Unbind the Cudgel
* Bind it to another character and complete all upgrades until the last
* Rest at the altar at the lowest level of Oathbinder's Sanctum
* Find that the last upgrade doesn't trigger
Link to save game, with characters present at the altar at Oathbinder's Sanctum's last floor: https://www.dropbox.com/s/zyavtkauq039bjq/OathbindersZip.zip?dl=0