It's some sort of luck that Sephiroth doesn't have to search very far before he manages to find the sword which had been thrown only a medium range away from him, and a good foot inside from that drop-off edge of this arena.

He settles the handle back firmly into his grip and turns back towards the Medusa, seems he's conveniently ended up on another flank. Charging in, Sephiroth executes an Oblivion-combo when he gets into range, before once more not only leaping back from his assault but taking a further step away as well. He wants to see what the counter will be, in good time.

If there will be one, it is looking like they might be on the edge of victory, here.