It looks to be a very... intimidating weapon to say the least.
Imagine you're Joe Footsoldier in Renaisance Italy, protecting Baron Evilguy, and some guy in a weird cloak walks up, stands in a basic L-stance and holds out his arm.
All of the sudden, there is a loud flash and bang seemingly coming from this guy's hand and Baron Evilguy falls over, quite obviously dead with a hole in his chest.
Firearms aren't common (And you couldn't see that he was holding one), and so likely the last thing you're thinking is 'gun'. More than likely, you're thinking: "Oh my god, he just held out his hand and killed Baron Evilguy! It must be some power given unto him by the Devil. He is powered by the very Legions of Hell! Run for your lives!"
It won't be game-breaking, more than likely, due to the firearm's technical limitations.
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In referance to the "mook chivalry" displayed in AC1, that's actually fairly realistic as well.
Swarmfighting is hard, you're more likely to hit your buddy with the long, sharp lethal piece of metal than the guy who you're aiming for. You don't want to do his work for him.
Also, note how they surround Altair, wait, feint, and genrally employ swordfighting tactics. It's only by virtue of the third-person camera perspective that you're able to live during the fights, which could be seen as indicative of Altair's supernatural awareness of his surroundings.
I think the combat was well-handled in the first one, and see no reason for it to not be so in the second.
Plus, if you're really in the mood for a challange, try killing in combat with nothing but Hidden Blade counters after you've unlocked counterattacks. Seriously, I think I've pulled one or two off, on purpose, ever. I mostly just threw 'im down and stabbed 'im.