I am not the least bit surprised finding a dishonest person claiming that dishonesty is not dishonest.
Deception
http://dictionary.reference.com/browse/deception said:
Something that deceives, or is intended to deceive; fraud; artifice.
Here is where your argument has ground. This is why I acknowledge your confusion. And here is why it is somewhat faulty ground:
1) Are the observers associating the swords with information that is not provided?
Yes. The observers must first assume that the swords are to be utilized for offensive measures.
a) Is this assumption accurate? Is it necessary?
Not necessarily. The observers may, or may not, adopt information qualifying as "something that deceives."
2) Are the swords intended to deceive observers?
Yes. The swords are "intended to deceive." They are deceptions.
3) Are the sword carriers being deceptive?
Yes. They are carrying swords "intended to deceive" observers.
a) Are the sword carriers lying?
No. They are not presenting false information. They are withholding information. They are taking advantage of an assumption that the swords are to be used violently.
-- In this case, lie ≠ deception.
Intending to take advantage of a false assumption = deception.
With regards to complete accuracy-
The observers must deceive themselves with an unproven assumption of the swords function. Withholding the information that the sword carriers are pacifists, with no intention of using the swords violently, qualifies as deceit - the sword carriers did intend certain observers to deceive themselves. However, in this case (not necessarily all cases), deceit is just not equal to lying. In this case, utilizing a lie is deceit.
In order for the sword carriers to be considered liars, they would need to have presented a "false statement". They would need to have presented an "intentional untruth", or a "falsehood". They did not necessarily present any false statement. They did not necessarily present "intentional untruth" or "falsehood". If they had communicated to the observers that the swords were intended for violence, and did not in truth intend violence, they would have lied. If they had done the opposite, they would have lied. Instead,
they did not provide the information necessary to prevent the observers' false assumption. Liars? No. Deceitful? Yes. Dishonest? No.