You don't sand a chip out but remove the material around the chip to the same depth that the chip is so the chip can no longer be seen. How would the surface look sanding to the depth of the small chip. Getting the same finish would be my concern so the area sanded looks the same as areas not sanded and does not look like titanium has been removed.
Something off the internet:
"Sanding, or benching, titanium alloy parts is a major cost element of the manufacturing process. Sanding removes burrs and improves surface finish to achieve drawing specifications. Sanding is also done to blend steps between cutter passes and remove material that milling missed."