If it’s really mostly about the one magic item, I suggest a different course of action entirely:
Pull the player aside. Tell them it has to be weakened for now, but give them a longer term quest to make it better. Most players will love the extra involvement more than overpowering the rest of the group.
@Pronell
I don't know. Giving them a long term quest might work, but giving them a long-term quest to pretty much fix what you just took away from them feels cheap and obnoxious. (Please don't take this as an insult.)
I'd discuss it with the player, putting your foot down if absolutely necessary, and I might look for an opportunity to make their character especially integral to a quest as a reward/compensation, but not a quest to fix the item, and only if the other players won't mind.
I meant bring it back to the power it was and then some, help it scale with the player.
One of my players has two pieces of Fraz’urbluu’s staff. He knows he can become a lot more powerful with more pieces but that it comes with consequences he would rather avoid.
It’s all a deep part of his personal plot and he loves it. Granted it was never something I took from him and nerfed.