As explained under Alma 46:12, here we have an example of thereof that does not appear to have a referent. We would expect thereof to modify hilt rather than sword (as in 1 Nephi 4:9: “and I beheld his sword and I drew it forth from the sheath thereof and the hilt thereof was of pure gold”). The 1920 LDS edition removed the thereof here in Ether 14:2, but the critical text will restore it since it is the earliest reading and appears to be intended.
Don Brugger (personal communication) suggests the possibility that thereof here in Ether 14:2 could be an error for therefore. However, as discussed earlier under 3 Nephi 8:9, the word therefore is always found at the beginning of the clause in the Book of Mormon (we exclude here quotations from the King James Bible). Thus it seems very unlikely that the thereof in Ether 14:2 is an error for therefore.
Summary: Restore the original thereof in Ether 14:2 (“every man kept the hilt of his sword thereof in his right hand”) even though there is no apparent referent for the thereof in this sentence.