No effect unless you get headshot. "Reduces damage and impact of headshots" current description in-game.
Tested and it didn't have any effect on damage taken with or without armor, with or without talisman.

Use this so your character doesn't get CTE on NG+7

Best talisman in the game. Can't believe it's not meta.

So for those of you that haven't taken anarrow to the face, your character takes extra damage and staggers when struck in the head by physical projectiles. AI luckily doesn't actually aim for the head, but when they're shooting from above you or when you're rolling you can occasionally catch an arrow in the head and it really ruins your day.
I assume that this talisman, the pumpkin helm, and anything similar would mitigate or outright eliminate the bonus damage/stagger taken from a headshot.

Might be useful for 5 or 10 minutes out of your 100 hour playthrough. Missed opportunity to make a talisman grant extra headshot damage.

Might be useful for 5 or 10 minutes out of your 100 hour playthrough. Missed opportunity to make a talisman grant extra headshot damage.

Headshots are not just limited to projectiles. Melee weapons that attack vertically or stab upwards can headshot dealing more damage. One major example of this is the Giant Hunt weapon art, which stabs upwards with a thrusting weapon. This talisman stacks with the pumpkin head helmet, reducing the bonus even further; it isn't completely negated even with both being used, but it's not felt nearly as much. Note that spells do not do headshot damage.

Getting hit in the head happens a lot more often than some may realize.

Sort of a shame Heavy weapons like hammers don't get headshot damage with jump attacks. Would make sense, and would actually make this talisman valuable.

Might be useful for 5 or 10 minutes out of your 100 hour playthrough. Missed opportunity to make a talisman grant extra headshot damage.