I think it's a gimmick weapon much like half of the tf2 weapon arsenal.
It's a weapon that was made specifically to make you feel good and do better about doing what you're already supposed to do. (Though this has been said.)
A lot of spy weapons already do this whether it be the Kunai, Big Earner, The Eternal Reward, etc.
Issue with it is, it'd be fine in pubs but it seems like it'd be gay as fuck in competitive.

I'd say toss the weapon and give it new mechanics but if half of tf2 weapon arsenal is gimmicky stuff similar to this, I can't really say the Diamondback should be given some special attention.
Comp - ban because i have no clue about competitive play and have an extremely shallow view on it.
pub - perfectly fine because it fits in with all the other reject weapons.
I don't think it's overpowered but I have trouble wondering why I should pick up the revolver unless getting backstabs are really that difficult.