Tatsuya's Ultimate Weapon - Persona 2: Innocent Sin Guides
Tatsuya's Ultimate Weapon is called the Legendary Katana and you can get this item from the Executive Suite inside of the Abandoned Factory dungeon. In order to gain access to the Executive Suite you'll have to explore all 6 rooms inside of the Abandoned Factory. You won't be able to do this until much later in the game because Door #6 inside of the factory won't open until you gain access to the final dungeon in the game.
For more information about where you can find all of the notes in the Abandoned Factory check out my Abandoned Factory Note Locations Guide. Or if you'd like more information about how to reach the Executive Suite you should check out my Abandoned Factory Guide.
I can give you the TL;DR version here, check the quick list below for details.
1. Read the 11th Note in the Abandoned Factory to learn about the hidden switchboard rumor.
2. Make Pacts with demons inside of this room and learn the rumor about the hidden switchboard.
3. Spread the rumor about the hidden switchboard using demons.
4. Go to Room #4 on the 2nd floor and in the southern part you'll find the door that leads you to the Executive Suite.
5. Speak with the man inside of the Executive Suite to get the Legendary Katana.
The Executive Suite is a very small room and inside of it you'll find two notes that you can read as well as one man that you can talk to. When you talk with the man he'll ask you to tell him everything going on with the city - it's important that you pick the first dialogue option during this interaction or you'll lock yourself out of getting the Legendary Katana forever.
If you pick the first dialogue option at the end of the conversation Nanjo will give you the Legendary Katana weapon which was his during the first Persona game. That's all there is to obtaining Tatsuya's Ultimate Weapon, it's pretty easy once you gain access to this room. Now all that's left is the optional step of upgrading this weapon even further!
One of the unique things about the legendary weapons in Persona 2 is that you can make them stronger by learning rumors from demons and spreading them. After you obtain one of the legendary weapons in this game you'll start to see rumors appear in the 'give me information' dialogue about the weapon you obtained.
Each Legendary Weapon has a total of 6 rumors that you can learn and spead; all of these rumors cancel each other out so you can only spread one of them at a time. Out of all the rumors the best one is definitely "Legendary Weapon is Supreme", this will give your weapon a significant buff once you spread it.
Most of the other rumors will add elemental damage to your weapon and make it deal water, fire, earth or wind damage. Last but not least you have the rumor that your Legendary Weapon is inferior. As you can probably guess, the inferior rumor will lower the damage and quality of the weapon significantly.
1. Legendary Weapon is inferior
2. Legendary Weapon has the power of water
3. Legendary Weapon has the power of fire
4. Legendary Weapon has the power of earth
5. Legendary Weapon has the power of wind
6. Legendary Weapon is supreme
You may be thinking that this all sounds great but it comes with one catch that sounds worse than it really is. Demons can spread a rumor about your Legendary Weapon being inferior and make it a piece of crap... As I said though, this sounds a lot worse than it actually is because demons will very rarely spread this. The only way you can trigger a demon to spread this is if you cause them to be Scared 3 times during battle and they flee.
Even if you make a demon flee from battle it's still not a 100% chance that they'll spread this rumor about your weapon. If this does happen to you though all you need to do is spread one of the other 5 rumors about the weapon to cancel out the inferior one.