> Þeir Flosi riðu vestur á sand. Flosi bað þá fyrst ekki allákaft ríða

og kvað þó hinn veg (note: accusative, ie impers construction) lúka mundu.

I think it's adverbial, isn't it? It (their journey) would end `hinn
veg' "that way", i.e. "in that manner" (riding hard), so they should
save their strength for now (fyrst).