So this card is a bit of a mechanical experiment, as the core of it is party-dependent and DM-dependent in a way that makes it hard to brute-force simulate. The effort/output curve is goddamned elegant on paper, but you can blow that curve in a heartbeat if you let your players carry around a bag of holding full of magma or hand them a sheath that serves as a perfect insulator. The lack of a (safe) sheath is half the fun.
I yoinked the temperature values from this Wikipedia page, with the idea being that the 200°C steps align somewhat-decently with the easily distinguished colors of hot metal, stepping from not-really-glowing at 400°C, to dull red at 600°C, to cherry at 800°C, to yellow/orange at 1000°C, to hay at 1200°C, and to white at 1400°C. The Heat Metal spell doesn't specify how red of a red-hot it gets things, so the 800°C I pegged it to is somewhat arbitrary.
It's also worth noting that, while you can technically get charcoal to hit ~1100°C in a wood fire without forced air, it's a fiddly thing. Your players will need to use a combination of magic and engineering to get the machete to 1000°Cin the field in a reasonable amount of time, and anything north of that will require some serious effort.
This means that, while the machete can theoretically dish out ridiculous amounts of damage, nine times out of ten the highest average you'll see (without a bag of magma) is +7.5 fire damage. That +7.5 does outpace the Flame Tongue Sword's +7 average, which is the usual upper limit I use for damage-focused rare weapons, but it's important to remember that this machete has both resource costs and situational limitations attached to it.
If your players are smart, have firewood, and someone is willing to burn a spell slot for a short-term damage boost, the average bonus damage per-hit will likely work out to be something in the +5-6 ballpark over the course of a full adventuring day. That's enough bonus damage that you'll need to account for it in your encounter design, but it isn't out of line for a damage-focused rare item.
That said, the theoretical lightsaber-like top end this thing has is deliberate. If your players have the opportunity to plunge it into the heart of the plane of fire and (briefly) wield the power of a dying sun, let them plunge it into the heart of the plane of fire and briefly wield the power of a dying sun. It'll be hilarious. They'll have to sit there and hold it for days as it cools down.