Okay, so I'm working on items to give my party and thinking about what future stuff to give them later in the levels. One of the things I've been pondering is giving the party's Paladin (Half orc, LG) is a stated version of the "Wrecktangle". I loved the design when I watched MichaelCthulu build it and was over the moon when I found a 5e stat block for it. Thing is I had the idea of making it a legendary item that is merely asleep when first found. Later on when he's leveled up sufficiently, it will awaken and become far more powerful and possibly sentient.

This is where I need the help. I need some advice as to how to level up a weapon and ideas of what all to allow it. This will be the first fully sentient weapon I've ever built so...

I am doing something similar for my party.  Each of them got an incomplete item at 3rd level, and each one had ways to complete it.  So, what i did is I homebrewed the items with their starting stats.  Then I copied those items with the stats for the more complete (but not yet totally complete) versions, then did it again and again.  So, at 3rd level they got the items, at 5th level they got the version with the 1st set of additional abilities, then at 7th they got the second set and then at 9th they will get the completed version.

Tricky part was swapping out the items on their sheets.  So I had Item A and a copy called 5th Level item A, 7th Level Item A, 9th Level Item A.  I think I ended up removing 3rd level version on PC sheet, replacing it with 5th level version, then renaming them both.  It seemed like it took a few tries to get the character sheet to update with the right version.

There are generally two ways to handle something like this...

Either they receive the weapon and it gradually "awakens" over time... like it might change entirely based on what level the player is. Or you give them an incomplete weapon... like maybe it has empty slots in the handle or something and throughout their adventure they might find the pieces to complete their weapon. 

I'm in favor of  just making it possible to augment it over time to grant it further powers. Maybe the player can actively choose what features to add to their Wrecktangle when the opportunities arise, and they can work toward it. 

Quote from TransmorpherDDS >>

There are generally two ways to handle something like this...

Either they receive the weapon and it gradually "awakens" over time... like it might change entirely based on what level the player is. Or you give them an incomplete weapon... like maybe it has empty slots in the handle or something and throughout their adventure they might find the pieces to complete their weapon. 

I'm in favor of  just making it possible to augment it over time to grant it further powers. Maybe the player can actively choose what features to add to their Wrecktangle when the opportunities arise, and they can work toward it. 

 That is exactly what mine did. In the wizard's staff, in the fighter's rapier and in the rogue's bracers were insets that had not yet been filled with the requisite gems/wood pieces.  They have to find the instructions that provide the requisite spells and materials to complete the items.

Is this the only way to do leveled/ascended weapons in dndbeyond homebrew? There's no way to code abilities that only activate at certain levels?

Quote from JackShoegazer >>

Is this the only way to do leveled/ascended weapons in dndbeyond homebrew? There's no way to code abilities that only activate at certain levels?

 Nope

Quote from JackShoegazer >>

Is this the only way to do leveled/ascended weapons in dndbeyond homebrew? There's no way to code abilities that only activate at certain levels?

 
Please see the Homebrew Items & Equipment FAQ #14: (https://www.dndbeyond.com/forums/dungeons-dragons-discussion/homebrew-house-rules/131411-a-homebrewers-how-to-faq). You’ll likely find answers to other questions you’re probably gonna ask elsewhere in that FAQ too.