the Jagged Knife event is a reoccuring discussion. But it's nothing that came into the game with ToA, been in the game at least also during DA.
As for game breaker...well Mega events are supposed to be that.
And as for "needs to be removed"...hell, no.
If you are the one that lags behind in tech (as one probably will be when one is playing at the highest 2-3 difficulties) and is military in a disadvantage compared to the AI...this even also can be one great advantage that allows you to win and previously extremly tough game.
hint: JK doesnt have any warships at first...if you can capture many planets before they can build up (m)any you will gain lots of highly advanced techs that will save you literally years of researching.
I posted a AAR of a suicidal game (DA) which I probably won (easily) mainly due to the JK event, if you care...look at my past postings and searhc for it

I'm having a new go at suicidal games on ToA...and basically I will be hoping for a JK-event to take place again sometime after the 2nd year or so