It never went anywhere, and maybe that's a good thing, but this is a demonstration Studio Gigante put together for a Star Wars fighting game on the original Xbox. Josh Tsui, currently of Robomodo, co-founded the studio and for some reason tweeted out this video on Valentine's Day<.
It's somewhat better than the trainwreck that was Star Wars: Masters of Teräs Käsi, a PSOne (not) classic that actually did release in 1997. I'm not a big fan of the shifting camera, but I'm assuming this is some kind of CPU-vs-CPU demonstration, to give it a limited benefit of the doubt.
The biggest issue, again, is how do you build a fighting game based on lightsabers, whose nonfatal strikes usually sever an appendage. If the game is about the Force moves or martial arts performed during saberlock, then it renders the most exciting part of the combat irrelevant until the finisher.
Polygon, which spotted this video on Thursday, reminds that Tsui's old studio was pitching a Star Wars fighting game — and one based on the Kill Bill series — when it closed in July 2005.