It increase the chance for your ninjas to perform their multi hit attacks, including the maximal which allows for their proc effects. Note that even if it doesn't proc the chance to effect, it might still be useful (in proccing high combo chase, for example Mei can hit 1-3 times, 3 being where it causes the knockdown, but if you have chase high combo, 2 might be better than 1)
It does not help when the ninja have a 100% chance to do (or not do) something, such as naruto, kiba and puppet users.
It doesn't appear to increase damage, that or very little increase(more hits = less damage per hit)
Do note, however, even if your character isn't performing any combo related attack themselves, their clones might (wind main clone as well as kakashi clone I believe have this)
Also, against sailor sakura, higher combo hit might be bad as she heals and grows per hit, so high combo heals her more (and like said above, deals less dmg per hit so she might net a heal)
So whether it is useful is highly dependent on the team you use it on. If you have a lot of chance proccer, then it is awesome, otherwise, it is not as useful. Thou given the fact that it also reduces enemy's chance to do the same to you, it might be useful defensively even on, for example, sage naruto.