
A bad weakness or the worst weakness? Let's see. Looking at the two elements, the effect and the discard condition, we get:
The effect: Wendy Takes 2 direct horror and removes her discard pile from the game. The first effect is bad but manageable; Wendy has 7 base Sanity and has ways to heal horror and/or soak future horror. The second effect ranges from mild to devastating. Depending on when you draw the Weakness, it can remove most of your deck, killing recursion tricks, shutting down Wendy's Amulet, and possibly leaving you in a very short horror spiral to trauma for decking yourself and more horror for drawing this again. There are not many was to mitigate the effects, with Rabbit's Foot (3) being probably the best way to dig for it early, maybe abetted by Drawing Thin or Take Heart to increase your failure and draw more cards. Of course, if you don't hit it early, this tactic may exacerbate the damage when the Weakness hits. If you have a Seeker in your party, they can help out with No Stone Unturned, but that's a lot of cooperative building, and none of these solutions are XP-cheap (especially since Rabbit's Foot vies for the Accessory slot with the Amulet, so you won't be doing them in the first few scenarios.
The discard condition: You do the terrible thing, then this card becomes your discard pile.
All in all, this is a way above average signature weakness, and in competition for the worst weakness, able to wreck a scenario or end a campaign.