There is an issue updating to Index 85 in the quest after killing Devas Terano. When Talking to the Daedroth you receive the message you see in the screenshot. I was able to bypass this by using a console command to update to Index 85.
I tried to follow the quest instructions. Heading to Baelkashpitu as soon as I killed Devas Terano, having the Soul Anchor in my inventory. I talked to the Daedroth with the weapon equipped as well as out of my hands.
Another thing to note is that after waiting for 3 in-game days, the quest does not fail either.