Because it can be extremely sharp.
When it comes to arrowheads, it doesn’t matter if the obsidian breaks once it’s hit the target. If anything, it may result in further injury to the target.
For reusable tools, reshaping the obsidian edge or replacing it if it’s beyond use would have been a fairly easy task for a skilled craftsman. Spending a few hours creating a new knife blade was time well spent if it meant dressing a deer. And as I understand it, an obsidian knife used for skinning could last a very long time.
As long as the tool is used for its purpose, it should be fine.
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