Sword is possible, but bayonet is not less likely. If you take a close look at the scabbard mouth of this piece, it looks like the brass mouth of a bayonet scabbard: you know, the leather bayonet scabbards with brass mountings. And if the trench art theory is correct, the rest could have been made from a brass shell. The crescent and the star appear inconsistent with the rest of the knife, and I think Erlikhan is right in believing that someone added them later in an attempt to enhance the value of the piece, which is an all too common phenomenon with unknowledgeable traders of militaria. Of course, we will never really know who made this knife and for what purpose, but to me at least it seems well suited to be a trench dagger.
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