Like all +2 weapons, the DM will add +2 to the AC hit when using this weapon but the damage bonus has already been factored into the damage wheel.
If a paladin wielding this weapon is attacking an Evil Outsider and slides a natural 20 and either the 10 or 11 (the two numbers with a ✸) is closest to the damage dot, the target will instantly be slain. No other classes can benefit from this weapon’s insta-kill effect.