As someone who has had to deal with 'I approach you with my thanhium axe' several times, I firmly believe that the main issue of it is simply over-saturation (considering I have seen literal squads of people run around with them).
If I personally where to fix thanhium, I would do the following:
1- reduce the amount that can be garnered from a node(?).
2- make it impossible to use if someone has a magic (regardless of what the magic is, specially since if it uses 'mana'). There should be no reason why a mage, paladin, housemage, herald, azdrazi, mystic, bloodmage, etc, should carry out a metal that acts as a direct opposite to what they need to use to use their magic (being mana). Whenever a caster casts a spell or are connected to their source of magic, the metal on their person should simply melt. (in the case of an azdrazi it should probably just melt almost instantly, same as if it wherein the hands of a Voidstalker). ((additional note: redline thanhium should not be a material that can be put into a pocket or translocated in general due to some weird deep lore of how translo works).
3. uhh... honestly you could just lessen how disastrous the frostbite is + maybe decrease the durability on it from being stronger than steel (I always thought it was as strong as steel) to be less than it.
But as stated by Orlanth, the main issue is over-saturation, with the second issue in my personal opinion is the fact that there are magics/CA groups that shouldn't even be around thanhium in the first place that are using it.