@Bastiono
And I'm saying whether this was explained in the same episode it happened or not is ultimately irrelevant; also who cares about what several Youtubers have to say, that's even more irrelevant to the point in question.
Shunsui having the blade is answering the question as to "where is Nanao's zanpakutou and why isn't she using it", which IS a thing being hinted at for hundreds of chapters, for possibly being quite so relevant as it ended up indeed being (because of her family name, her Lieutenant position in his Squad and the fact she was never seen even using shikai, despite being so high on the ranks that she was nevertheless present in some of the biggest battles of the entire series only using Hadou).
There's literally no problem in the sword being revealed to be with Shunsui, nor the timing of it being revealed only now, because it was somewhat expected to eventually be something the story would touch upon at some point anyway (which is why it was a pleasant surprise to whoever especulated about this in the past).
So, let's go through this step by step once again:
1- Would it be reasonable to assume it was in Soul Society?
Sure, why not. I'm not saying it couldn't be there, just that it wasn't. Which brings us to:
2- But must it be there for narrative cohesion?
Not at all. They go on to explain precisely why it ended up in his possession.
3- Would it be an issue for it not to be in Soul Society, and instead somewhere else (aka, with Shunsui)?
Precisely my point, also no.
It's pointless to get worked up about it not being in Soul Society, it didn't HAVE to be there to be consistent with what was ultimately revealed and why. There would be a problem if they didn't show how Shunsui got his hands on it and why, for example, as it would lack the context.
After all, the sword in question (with which Nanao should be fighting, and for some reason wasn't) could just as well be speculated to have been under his watch for a long while now, given how she is always by his side no matter the outrageously risky situation, and yet, suspisciously never seem to be with a zanpakutou ready for action even then (it took a literal ascended-to-godhood villain to fight them both for it to be actually be put to good use).
Now I'm basically just to pointing out how reasoning could also go on the other way around. Really, it's no quantum physics nor anything too absurd. It can hardly be called a deus ex machina if it can be seen coming from other elements the story usually uses to foreshadow reveals, to repeat it once more for good measure, which is the very reason this thread was started.
As for Barro's reasoning, as you quite well demonstrated, he had no reason not to underestimate her power in all his godlike might and power-trip moment. It's all in there, he saw the sword reflecting and cutting one of his arms, and thought:
"This is a bluff, I just didn't even use as much of my clearly superior power to completely obliterate them and this little one trick pony sword they claim to be able to reflect my oh so powerful glory no matter what. Which clearly can't possibly be true, so let's just attack it harder to absolutely obliterate these arrogant fools that think my power can't harm them somehow"
Of course,
Pride Before a Fall being applied in ironic poetic fashion, the actual arrogant fool gets reflected and his own attack made him lose, only now reasoning "Well fuck, I guess it did reflect even at full force, huh?"