Bonesmash raises your Appeal per click
The official game description says it directly: “Upgrade your hammer to Bonesmash and get even more Appeal”. In a clicker loop, per-click value compounds - every click you ever make afterwards earns more, which is why hammer upgrades sit at the top of the tier list.
Its exact position in the upgrade chain - how many tiers below it, what came before - is not documented in any public source. The game shows the price on screen; treat that as the truth and bring the number to the upgrade planner.