The hatchet combines the functionality of the knife and the pipe. It's an efficient and quick melee weapon that can be thrown to stealthily take down targets from a short distance. It can also be used to pry open certain hatches. In addition, the hatchet can dismember a soldier upon doing a takedown (combat or stealth). In addition, the hatchets are extremely sharp and strong, able to dismember a robots arm without breaking on impact. The hatchets are extremely durable, able to destroy the Ausmerzer's claws with three swipes.
The hatchet can be useful when you want to be stealthy as it can be thrown and be used for takedowns. If a soldier is all up in your face, this weapon will get the job done but make sure no one else is around or else they will most likely kill you.
The only con about the melee weapon is that the death animation variant from quick to length (e.g. B.J. pulling a soldier to the ground from the legs up, and axing them twice).
It's best to throw hatchets unless the area is secure for you to do a takedown. That being said, not all hatchet throws wont kill enemies, often knocking them forward or to the side.
Getting more hatchets are useful when playing on harder difficulties, getting four to five hatchet earlier on due to not having a lot of ammo. In addition, getting more also allows the player to kill a soldier if the latter doesn't drop from one.
The hatchet is the only melee weapon so far in the series that has both lethal and non-lethal stealth executions (rarely happens).
In a letter found on the Ausmerzer, it's noted that they are carelessly placed. This can be seen as a soldier has one on a dart board or often on the ground in areas.
B.J.'s favourite method of execution with the hatchet seems to be cutting the oponent's arm and them aiming to a vital organ. We see him do it twice during cutscenes and more times against regular enemies.
No enemy soldiers seem to use the an hatchet except for B.J. and Gerald.