This perk increases the chance to hit an opponent's legs in V.A.T.S. by 25%, thus making it easier to hobble the target (reducing their movement speed by crippling their legs). As with most perks that increase hit chance in V.A.T.S., this bonus is multiplicative, not additive.
In the 1990 movie Misery, a serial killer hobbles her favorite novelist by smashing his foot with a sledgehammer. When asked if the perk references this, Joshua Sawyer posted "Not directly, but the icon does suggest that."
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