Currently the sword's proc dispels the target but, by most accounts, Vindication randomly dispelled the wielder in classic and not the target, similar to the Glowing Black Sword as it was one of the "cursed" weapons added into the game.
Nearly every post on
allakhazam mentions the proc, which there was some confusion over, confirming that it did in fact dispel the wielder and not the target. However, a few posts mention there being two versions of the sword with one being triggerable and/or dispelling the mob. At later dates others say that their version is broken, not proccing at all but instead giving the message that it was out of charges.
Will be looking for more evidence since comments about the proc seem somewhat varied.