A strong contender for most unplayable card in the game right now, at least if we're talking Hard/Expert. The upcoming Finn Edwards (who will have 4 Combat) may be able to use this card, especially since he will be very good at exhausting enemies first (which turns off Retaliate). But for Skids or Jenny, this is 100% unusable on anything but Easy, and even there it's unnecessarily dangerous and I would not recommend it. Obviously, Sefina can't even consider it.
(Update: Finn actually has 3 Combat. So I think this is pretty bad even for him.)
Although consistent +1 damage is one of the most desired traits in a weapon, the fact is that most enemies in this game don't have Retaliate. Given that Knuckleduster lacks a to-hit bonus, and that Rogues have low strength, using this card means subjecting yourself to a ton of unnecessary damage. You can evade and exhaust the enemy first to avoid this, but I really don't recommend this. Evading enemies and then fighting them is incredibly wasteful for any investigator not named Finn. Either just kill them or evade them, but don't waste actions doing both. Rogues have plenty of other weapons to pick over this.
This card continues a very weird trend in the design of Rogues where the class gets cards that don't remotely fit the investigators. Rogue weapons like Knuckleduster, Switchblade, and .41 Derringer all seem designed to work for investigators with really high strength. Except, you know, none of the Rogues actually have that, so Rogues are terrible with their own weapons. (In contrast, Survivor weapons like the Fire Axe and Baseball Bat are much more sensibly designed to work for low-strength investigators, so Survivors are actually good with them.)
Anyway, if you asked me to name the least useful card in the game right now, I think I might pick this one. Although, come to think of it, at least it doesn't cost 4 XP like the Springfield M1903 does. So maybe it's the only second-least useful card in the game. That's something.