Sabrewulf’s Instinct grants him an overall damage boost on all attacks. This means that he inflicts more damage when his attacks hit, and more chip damage when his attacks are blocked. The best way to maximize on this would be to Instinct Cancel during combo opportunities.
After a Lockout or Counter Breaker your Instinct can really be put to its best use. After your Counter Breaker or Lock Out, Instinct Cancel and continue the combo. The damage boost that you gain while in Instinct will allow you to do a damaging combo, inflicting nearly 80% damage, while your opponent is helplessly stuck in a lockout state.
While Instinct Canceling after a lockout is ideal, it is certainly not the only way to make your Instinct useful. You can Instinct Cancel out of any combo, almost forcing the opponent to attempt a Combo Break to avoid losing big damage. You can use this as a way to bait your opponent's Combo Breaker attempt, allowing you to land a successful Counter Breaker while your Instinct is active.
Instinct Canceling also allows for easier hit confirms and combos that are not possible under normal circumstances. Normally, you cannot combo your Back + Heavy Punch attack into another Back + Heavy Punch. Using Instinct Cancel, you can activate on reaction to Back + Heavy Punch connecting and use the added advantage of the Instinct Cancel to follow up with another Back + Heavy Punch into your Ragged Edge Opener. This helps in two big ways: first, it allows you to poke with single attacks as a way of hunting combos by hit confirming attacks that you normally cannot hit confirm, helping you avoid Shadow Counter happy opponents; and second, Instinct Cancel not only allows you to form combos not normally possible, but to do so with an added damage boost.