Okay so.
Since you are using a weapon to initiate the grapple, do you gain A) All feat and untyped bonuses to hit with that weapon with the initiating grapple attempt, just like you do with trip and sunder weapons, and B) The weapons enhancement bonus to the grapple and maybe to maintain the grapple.
If it's just to the imitation of the grapple, which seems reasonable given the wording of the feat implying that you kinda don't count as having the weapon in hand while the grapple is ongoing, that seems pretty decent.
This feat might be a automatic choice for grappling builds depending on how you read it, but I am uncertain since it doesn't explicitly state you get your weapons bonuses to the grapple attempt. And it does state it as 'when you initiate a grapple' so I wonder exactly when the weapon is used, after the successful attempt (which surely doesn't make sense since you wouldn't then take a penalty except for maintaining the grapple), or as you grapple using the weapon (which would give some credit to my interpretation, but otherwise seems like the intent regardless if the grapple gains the weapons bonuses or not).
Am I off the mark here and seeing what I want to see from this feat? I've not seeb this brought up elsewhere so I am curious to know if this is how this works. What do you think?
My reading of that feat would be different:
You don't get any bonuses from the weapon at all, as you don't grapple with the weapon, but have it out to threaten (not in the sense of the rules) your opponent with it and deal damage.
I'd go with the "this feat says what it does, it doesn't do what it doesn't say" approach.
So, basically holding them at knife point? Given that the feat gives you an Intimidate bonus that does make some sense but that means this feats flavor and mechanics are really all over the place. It reads like you actually stab them since they take piercing damage on the initiation of the grapple and if your opponent breaks thr grapple a bleed.
Edit: I take back the piercing damage. It doesn't even say that. How confusing when it says you do actually stab your opponent.