At first glance, the Toxin Blade behaves like a normal combat knife. However, when it hits a target, it will briefly stun them, making it easier to land additonal shots. The target will quickly become unstunned but another hit can stun them again.
Otherwise, the Toxin Blade is the same as the regular combat knife.
The Toxin Blade can be quite useful for defeating groups of enemies early in the game. By constantly switching between targets, the player can keep the entire group stunned, making all of them harmless as their health is whittled to nothing.
It's ability to stun makes it very useful against single targets, as the knife will constantly stun the target, making them unable to attack.
The same augs that make the combat knife useful also work very well with the Toxin Blade. Combat Strength makes it a lot more powerful, while Speed Enhancement makes it easy to perform hit and runs, circle-strafe enemies, and perform the tactic mentioned above.