Now that we've had plenty of time to digest, I can confirm that the Luger is one of my favorite weapons. Even if it doesn't have raw damage output, a fast Fight option is pretty amazing in allowing you to polish off a low health enemy or attack at unusual timing points. A Luger in one hand along with a 'primary' weapon in another means you can often hit a 3 HP enemy without needing to spend an extra action or waste an ammo on your primary weapon, and you can frequently handle a little more fighting through a Luger-Reload-Luger sequence if one of multiple enemies isn't engaged to you. It's very effective on lower difficulty enemies or low-health aloof enemies, and even if you only have a Luger, you always have the option of squeezing out a couple of damage using it and basic fight actions.
The fact that it's Illicit only helps when it comes to things like Underworld Market and Fence. It may not be as good at spiking damage as some of the other weapons around, but I find it's more than good enough to earn its hand slot on both primary fighters and flexes.