While I do think it being burst damage is very strong, making the most of it requires you to be 1) bleeding or dying and 2) surrounded by enemies, at which point you're in a lot of danger. I would question to what degree that situationally makes up for the strength of the trait.
Viewing post in Hobgoblin Ancestry for Draw Steel jam comments
It is situational, which is a fair point, though you could also point out a number of ancestral traits that might not come up often and are equally situational.
To clarify since my previous wording may have been a bit severe: when I say 'very strong' I don't think it's busted or anything, but it is two features in one so it's going to be notably better than other options. Will it break the game? Nah, not at all. As you say, it's situational, and in a game about being cool heroes people will have fun with it—but the impression is still worth noting for consideration.