I like the idea of a spy-checking melee, however I think it should be used to search for cloaked spies, not make disguises even worse then they already are.

Remove the un-disguise mechanic, and replace it with an auto-decloak on-hit instead. Next, give the weapon an increased range like the Disciplinary Action, as well as an increased swing speed. Keep the 50% damage debuff and cloak drain as-is.

If that's too hard to make work with Source Spaghetti, it could have a low-damage but long-lasting bleed effect, complete with the lens shattering on initial hit.

Either way, this lets a player sweep a room more efficiently when dealing with a particularly pesky Frenchman.