The Bone Arrow is a variation of the standard Wooden Arrow, which does less damage than a wooden arrow, but has a giant head.
The giant arrowhead of the bone arrow makes landing shots with the Hunting Bow, Compound Bow, or Crossbow significantly easier.
While the bone arrow reduces the damage of the bow or crossbow, players who are less confident in their aim will find far more significant value with the bone arrow simply due to landing more shots.
If you are the kind of RUST player that misses even 50% of your shots, bone arrows might be the way to go.
The bone arrow also has the significant advantage of not requiring Stone material to craft. Gathering stone is essential in base building, mainly to stop players from flame raiding your base early in the wipe.
Exchanging the stone cost for Bone Fragments is a not insignificant trade, as you will often find yourself with more bone fragments than you need for bone armor and Bone Knives.