The tradeoff of the skull seems rather steep to me. The only feasible user of the item would be a Fearsome 2H axe/sword user who actually aims to be surrounded… and then he really NEEDS to get any bonus morale he can get, both for increased survivability and morale malus/fleeing avoidance.
So the skull is essentially counter-productive to itself.
I guess it would be ok for a “Dastard” character, as he would suffer no further penalty from the item… but then again I avoid this trait like a plague