Wy was I given the orcish sword of siphoning by some random traveler in the hills NW of Solitude? Is it for some purpose or just for me to have?

If it was a Fugitive, he gave it to you so he wouldn't be caught with it. He also threatens to kill you if you turn him in. Shortly after, another person will approach you looking for the fugitive. You can lie, give him away, or just give him back the (random) item you were given.

You forgot that you can just kill them both and be done with it.

Did the person rush up and say "here, take this...don't say anything...etc etc."? Did they seem kind of shifty? lol
There are scripted bandit/thieves who will come up and tell you to 'hold' something, usually when the rightful owner is hot on their trail! You'll usually see the owner right away or withing a minute or two, but sometimes not. I had the bandit/theif come back once and wanted 'his' item back, he got the edge of it back anyway and quickly no longer cared about it.

Or anything else ever again.

I hate those guys, so unprofessional! lol I usually give the item back to the owner if they show up.

Edit: ninja'd! lol