to my little knowledge, it doesn't really take place in the manga ; it's kinda a parallel story
anyway, we see Niko in the beginning of Vol22
it would take place at the beginning of the new arc
I think that story was just a bit too long to put it in the manga too and to not bore fans (i would have really appreciated it to see guts slay some Mandragoas on paper) who have the game it was left out.
Seems it just happened on the way, maybe a little bit before guts last meeting with zodd.
could be wrong tho