So Nargrym's Steel Hand mandates that its owner make a Will save or go on a murderous rampage. The wording implies that they have to do this vs. every giant they see. So naturally, there was some cause for concern when, at the beginning of Part 3, the party saw what the book literally describes as "countless" giants. Personally, my party was set, because I'd implied when our dwarf received it and put it on that while it wasn't a truly sentient item it had some limited awareness, and wasn't going to compel its wielder to certain death. But I wonder, how did you other parties handle it?
(on a related note, Ferin. I have plans for her. I would like the dwarf to not murder her on sight, which will be a difficult proposition already given that he was KOS for all giants before the damn thing. Suggestions?)
I applied a range. The will save only applied if the giant was within "running" range of the PC wielding the Steelhand. Typically within 4x distance of the character's normal, unmodified movement. I debated other options, like max range of Character Level x 20ft, meaning as the character went up in level, the bloodthirst of the hand drove them to greater lengths (literally) to pursue giant quarries, and also "just within charge range". The former I abandoned because although it was interesting to me I didn't want my player having to readjust those numbers every level on top of everything else. The latter I abandoned because it didn't have enough teeth.
I applied this range because, as you said, it would become a little ridiculous and would have my party hobbling and sometimes PvP'ing their partymate to avoid getting mobbed by giants.
Disregard the fact that they got mobbed by giants regularly, anyways.
I'm about to send my group into act 3 of book 3 as well. The half-orc that wears the hand has passed his checks up till now (in secret) - and it wouldn't have mattered in most cases anyway since they are true murderhobos, leaving a trail of destruction in their wake. The half-orc fighter is a noob to the game, and I don't want them to earn a TPK simply because they didn't know to research an artifact first. As a result, I've hinted to the senior player in our group (a half-orc shaman) that there may be an problem associated with the hand in the near future.
They know about the encampment in area Y due to the fact they pushed through the caves in area H and stuck their heads out to look. The shaman has a raven that scouted around, reporting back that there are "hundreds, if not more, of giants" down in the valley. They shouldn't have a problem for a while, so hopefully they learn about the "curse" in a situation in which they intend to fight anyway.
I think the range idea from Yossarin makes sense, too. Realistically, at a distance, you (particularly a fighter) wouldn't even be able to perceive that the creature in in the distance is a giant anyway.