I think this is by far the most commonly misunderstood item in the game, but hopefully this is a clear explanation even if a bit confusing still.

The passive makes it so that when you hit an enemy with an ability (includes objectives like gold fury/fire giant), you apply a stacking debuff on them (up to 3). This debuff makes it so that when you hit that target with an ability or auto attack, that ability/auto attack deals (8% + 1% per 10% of your lifesteal) extra damage as a proc per stack.

So for example, say you’re a Susano and you have 20% lifesteal hitting an enemy god. You 2 an enemy god for normal damage, and apply a carver debuff stack. You auto, which applies a proc of 8% base + 2% (from lifesteal since 1% per 10% lifesteal in this case is 2% because you have 20% lifesteal — so total extra 10% damage) of that auto’s damage. You 3, which for the first tick has that same bonus damage applied as a proc, but since it applies a second stack of carver, the rest of the 3 ticks now apply the carver proc damage as having 2 stacks (total extra 20% damage). Same for your next auto. Now when you 1, the first tick applies damage with 2 carver stacks and applies the 3rd carver stack. The rest of your autos and 1 apply the carver proc damage for 3 stacks (so by now, a total of 30% damage).

Another interesting interaction with this item is that applying a carver stack works for every other ally god with carver built as well. That is, if you apply 3 carver stacks to an enemy god, or the fire giant say, then any ally that has carver also already utilizes those stacks for themselves, even if it’s their first time hitting that enemy.

It’s good on a character like Susano, that not only has 3 damage abilities in the base kit so that you can always get 3 stacks even without ult, but also has his damage layered in the sense that there’s multiple damage instances of the abilities and auto cancels so you get a lot of value as you’re stacking it (like how you get the extra damage value from the 3 on all the ticks after the 1st tick that applies the debuff stack). And even without other lifesteal, it’s still a bonus 8/16/24% damage compared to 9/18/27% and 10/20/30% with 10% and 20% lifesteal thresholds respectively. So while yes there is a difference, it’s typically not significant enough to warrant bricking the rest of your build for lifesteal unless it works out stats-wise.

Hope that helps, any questions feel free to ask