It wouldn't be a downgrade to use the weapon on Gladiator. Relic is job-specific so his would only apply to Paladin. His Garuda weapon win can be used should he decide to play as Gladiator. That may be unlikely but it's his right to Need on it for any purpose really.

Besides, not everyone inspects everyone and it is entirely possible he didn't even look at your gear. You assume he intentional tried to screw you over. If you have concerns about gaining a weapon drop, better to voice them prior to the fight. Otherwise, it's all fair game.