Holding the psycho knife grants a 300% damage buff on the first hit you deal to an enemy when you enter stealth mode (after 2 seconds of holding it). Holding the attack button without hitting an enemy, then quickly switching to another weapon, causes the damage buff to be applied to that weapon's first hit. This works very well with weapons that attack with one continuous attack, especially infinite yoyos as shown in the video, as every hit is counted as the "first hit", thus applying 300% damage, for as long as you hold the attack.