Well Both! LOL
If your off the boat and want to have a little beach fire it's great.
If your confronted by some stupid Sea Ray captain you could use it to split his OOPs got off on a tangent LOL.
Protection plus:
And if you read enough "I learned about boating from that stories" you will eventually read where some sailor got out of a tight situation by hatcheting through a bulk head or stuck escape hatch.
If you've been around boats long enough sooner or later you'll see where one has become wracked to the point most or all hatches and or doors simply don't open. Now say you got someone on the other side you would like to get out. Your breaker bar or torque wrench isn't going to do it. And typically you need them out in a big hurry.
A very high quality hatchet/sledgehammer is a very useful tool. You could carry a firemans ax but there is little room to swing it. Plus the sledgehammer is great for pounding in the plugs you have in case a through hull lets go. Some time a rinky dink hammer just barely sets the plug, under load and vibration it can come out. You pound a dry plug with a baby sledge into a fixed opening and let it swell it's there till you get home. The real old salts will have the correct size plugs tie wrapped to each and every raw water opening and the hatchet nearby to drive the point home. I can't say I've done this yet but it is on my list and will be done prior to our long vaction offshore.
If ya really want to know some essential tools read latitudes and attitudes, its a rag bagger mag. but these guys really cruise around the world and are out to sea sometimes for weeks, not hours or days like we are usually. If it's a matter of life and death they usually have it on board.
Have fun boating garyd