Yeah, but it was mostly cerimonial and had no mystical powers. Very few actually charged into battle with this blade, and those that did fought with a much straighter version of the weapon, one that could actually be of use in combat.
Precisely this. It's not just the fact that the ability is called "Mystic Blades" (although some of G&K's religious bonuses skirted too close to being magical effects, such as Faith Healing); what makes it worse is that the unit is not a real-world formation. A kris is a dagger rather than a sword, it was not used in regiments of kris-armed soldiers, and in any case the beliefs in magical ones relates mainly to silver kris, and silver is not a suitable metal for a battlefield weapon. So even if we fudge a bit and say that the unit's abilities refer to their belief that they have magic weapons, rather than actually having them, it doesn't make a lot of sense - if they have silver kris they aren't going to be useful combatants. If they have steel or iron kris, they wouldn't place much faith in the weapons' magical abilities.
As with so much in Civ games, an implausible ability may pass muster in itself if it works well thematically within the game - such as some magical religious abilities, the Huns' city naming system or calling Sweden's UA "Nobel Prize". But when it's both implausible (say, the idea of 10-year carnivals spreading one's influence throughout the world) and a bad idea in concept (Brazil in Civ, say), the whole becomes difficult to stomach. A nonexistent unit with a magical ability falls into the same category.
Again, mysticism builds YOUR empire, while these nonsensical swords can destroy your enemies. None of the mysticism beliefs give your men supernatural powers, they simply make them more culturally aware of cows/ forests/ gold, giving more culture, or giving you a greater means of communication, making you better able to exchange info an make science. The closest to supernatural would be defenders/ just war, but all that one does is fill one with devine purpose and a sense of being, not embue him with super streangth.
Faith Healers is a magical effect, without an explanation you can arrive at even at a stretch. Messenger of the Gods is a magical effect (it doesn't give you greater means of communication, just gives you extra science if you already have a means of communication - i.e. roads). Goddess of the Hunt is a magical effect (if invoking a goddess genuinely makes your people better hunters, it's magical. If it doesn't, invoking a goddess would have no benefit to food production). Fertility Rites is a magical effect that's still harder to explain away. Guruship appears magical, but it's not even clear enough why it gives you a production bonus to be sure.
Any religious belief that gives you "physical" bonuses that relate to environmental products (faith healing, food or production) is intrinsically magical, since it's saying "your belief is affecting the physical environment around you". The kris swordsmen fall into this category. Religious effects on abstract concepts of faith, culture and to some extent science, and on gold generation (since this is an economic product rather than an environmental one) are acceptable in principle, but not all of these are handled in credible ways - such as Messenger of the Gods.
If anything, I think it's great that they have a UU that is more known for its culture than it is for its fighting because that captures the 'essence' of Indonesia to me. It's a way to sneak in the Kris without designating a UB or UI for it, which there can't be of course, which allows them to have both the Candi and the Kris. Love it
There are far better ways of representing this - if they had to include a kris-armed unit (to you it may seem like capturing the 'essence' of Indonesia, to me it feels a way of capturing moderately well-known Indonesian stereotypes), they could have simply given it an effect that related to culture or faith generation.