These are the uses of the stone:

- Sends back phantoms in your world (not invaders) to their world.

- You being the phantom, this stone sends you back to your world (Also works if you're an invader).

- Vanishes NPC phantom allies (beware as their summon sign won't appear again even after resting at the bonfire. A friend of mine mentioned that it shows up again if you reload the game.

- If you're the host and use it, you can see your victories as a phantom.

The reason for the "beware fickle use of this item" warning is because if you use it either as a phantom or as a host to send back people, you are committing a sin. This last part needs confirmation as I've only tested it as the host sending someone back and it did add me sin.