1. A noble holds it and goes through battles with it. The conditions that lead to prestige increase from battles are unknown to me. Not all battles lead to prestige gains, and there doesn't seem to be a clear connection between quantity of battles and prestige gains. Possibly size of battles? There exists some vague "glory" value which might play a role possibly.
I have reason to believe that getting it repaired also has a chance to add 1 prestige. I had my one item repaired, and when I got it back the prestige was higher. Of course, it might have gained it before the repair, but I don't think so.
