"Your first parry move doubles as a damaging axe attack."

The Whetstone allows Cuphead and/or Mugman to use their parries as an axe attack. This is useful to attack bosses that can give contact damage as the axe attack can give you a bounce. The charm is especially useful in airplane levels as the parry can be used indefinitely rather than waiting for the player to land to use it again. Basically, you can parry on non-pink projectiles or objects also damaging it if is killable e.g Deadly Daisies in Forest Follies or even bosses.