I was searching for treasures and triggers all over Castle Ironfist, yet it was right in front of me. Though it's just a subtle easter egg, I'm glad that it finally makes sense. As it really is a strange formation.

Do take a look at it yourself! If only it had a metal texture, it would totally stand out as a sword blade!

Oh, and also I was wrong about it being a stand-alone object, by seeing flat grass terrain under it. But I have looked through other steep hills to see that there is a general ground-level of grass everywhere... which is strange, but there it is.