That FAQ contains the following question-and-answer:
How do scorpion whips work? There are several published sources of scorpion whips, and they seem inconsistent.
Change the last sentence in the Ultimate Combat scorpion whip's description to say "If you are proficient with both scorpion whips and whips, you can use a scorpion whip in either the normal way, as a typical light performance weapon, or as a whip. When you use a scorpion whip as a whip, it is otherwise equivalent to a whip, but it deals lethal damage and can harm creatures regardless of their armor bonus." This change will be reflected in future errata.
What this means is that the scorpion whip is normally a light performance weapon with no other special weapon features, but that someone with both proficiencies can also use it as a whip, in which case it acts precisely like a whip in all ways (one-handed weapon, attack out to 15 feet, provoke an attack of opportunity, can use the Whip Mastery feats, etc) except that it deals lethal damage and can harm creatures regardless of their armor bonus.
Emphasis mine. Thus the scorpion whip is pretty dumb. That emphasized difference is the only thing that's changed from the printed version of the scorpion whip, analyzed below.
...However, as written, proficiency with just the Ultimate Combat scorpion whip is worse than proficiency with the dagger
If you're playing without the Internet,1 the scorpion whip as presented in Ultimate Combat (Aug. 2011) (and the Pathfinder Reference Document) is a light exotic weapon that deals 1d4 points of slashing damage and ×2 damage on a critical hit, costs 5 gp, and weighs 3 lbs. Also, it possesses the quality performance, which means that
When wielding this weapon, if an attack or combat maneuver made with this weapon prompts a combat performance check, you gain a +2 bonus on that check.
(I'll go out on a limb and assume you don't care about that part.) Anyway, the description in Ultimate Combat says only that
This whip has a series of razor-sharp blades and fangs inset along its tip. It deals lethal damage, even to creatures with armor bonuses. If you are proficient with whips, you can use a scorpion whip as a whip. (144)2
Although the scorpion whip has no whip mechanics in that first sentence, it's still called a whip. That's no surprise. That's just physical description at this point, not yet engaging with the weapon's mechanics: it's obviously not a whip yet because it's still a scorpion whip. The weapon still functions as the table says it does, like any other light weapon, threatening adjacent squares, usable with the feat Weapon Finesse et al., better in the off-hand than a 1-handed weapon, and so on. Table and text haven't betrayed us.
The second sentence saying that it deals lethal damage even to creatures with armor bonuses let's the GM know he shouldn't look at that first sentence, say, "Your scorpion whip lashes the Wiz5's chicken familiar and deals no damage because you used a whip!" and follow up with a Nelson laugh.3
The third sentence is where things get odd. Were a character proficient only with the scorpion whip, he'd be proficient with an exotic weapon inferior to the dagger. Were a character proficient only with the whip, he'd be able to use the scorpion whip exactly like a whip. But a character proficient with both scorpion whip and whip gets options.
- The character can use the scorpion whip's printed statistics when using the scorpion whip as a scorpion whip. That is, a light weapon without reach that threatens adjacent squares and deals lethal damage, similar to a crappy dagger. (It'll have the quality performance, though!)
- The character can use the whip's statistics when wielding the scorpion whip as a whip. Yes, and it'll do the whip stuff: provoke attacks of opportunity, have a 15-ft. reach, deal nonlethal damage like a whip, and so on.
The character can switch between these uses of the scorpion whip apparently whenever the scorpion whip's used, therefore threatening an area and being able to whip folks. This makes the scorpion whip interesting and versatile but likely a huge and unwise investment.
You can review the arguments that led to the FAQ ruling
The first post in this thread includes a summary of arguments, discussion, and developer rulings. It was started 2 weeks before this answer was posted and had 70 people marking it as a FAQ candidate when I posted this answer initially. On May 1, 2015, after the number of folks marking the post as a FAQ candidate had nearly doubled, the Ultimate Combat FAQ was updated to include the information that begins this answer.
1 Obviously you aren't, but maybe you've printed this answer to show your friends.
2 This version of the scorpion whip should supersede the identically named item presented in Adventurer's Armory (June 2010). The Armory version has the qualities reach, disarm, and trip (but not performance) and this slightly different descriptive text:
This whip has a series of razor-sharp blades and fangs inset along its tip. It deals lethal damage, even to creatures with armor bonuses. If you are proficient with whips, you can use a scorpion whip. (4-5)
Note that the Ultimate Combat scorpion whip isn't allowed in Pathfinder Society play. The Society's Additional Resources (a 22-page download-only PDF) says that
The scorpion whip found in this book is no longer legal. Please refer to the Adventurer’s Armory for the legal version. (20)
Likely the Ultimate Combat version's disallowed because the Armory version's clear on how the scorpion whip behaves: its statistics are precise, and there's less room for GM error.
3 Probably best not to let Nelson GM.
