When held, the player sheathes the weapon and prepares to use one of two special attacks. Using a normal attack while in Hold will cause the player to bring the katana out in a powerful horizontal slash. Using a strong attack will cause the player to perform a parry with the blade, giving them blocking frames in the process.
Use of this skill can be quite powerful in the hands of a good offensive-minded player, depending on the specific enemy. The normal attack allows the player to get in a powerful attack inside a short window, useful against enemies whose attacks have small recovery times. The strong attack allows the player to parry without the need to equip a shield in the off-hand, which can be handy depending on the equipment loadout, though in order to conserve FP simply carrying a parrying tool in the off-hand can be more economical.
It should be noted that while entering the Hold stance is an easy telegraph of your intentions, the strong attack has the same startup and a similar number of parry frames as a dedicated parrying shield, meaning that under the right circumstances it is possible to parry another player on reaction. As well, most people will not expect to get parried by a katana so the surprise factor works in your favor.