Demonstration (warning later boss spoilers)
When enemies are blinded, they will face you until they start the first hit of their combo. If you move after the attack has been queued by the AI….they can't follow or track you with the rest of it. Because they're blind. 🙂
Catwalk seems to make this a bit more effective, in that often enemies will also do a followup queued attack (that isn't normally part of the combo). So you can have bosses just wailing into a corner while you watch.
This turns any combo into a free chance to do damage. Just get behind them and wail away.
Even if they do turn to you to attack you, they often miss anyway….because they can't auto home with anything. They can only attack in your general direction. Because they're blind.
Naturally it is going to work on some enemies better than others. If an enemy has huge sweeping attacks, and their combos are short, they may not know exactly where you are, but if you aren't careful you can get hit anyway just because of how big their hits are.
But if a boss is designed to follow you tightly with their combo attack, a blinding shell turns that combo into a free damage opportunity as soon as you avoid the first blow. And you can avoid that blow just by strafing.
This is also what happens with projectiles. It will not turn off the ability to use projectiles. It will make it so they can't target you properly with them. They can still use their attacks, and if you are standing still directly in front of them, they'll probably hit you. But if you move, they'll miss.
Basically, its just a bad explanation in the tool tip, but the name is right. They're call "Blinding Shells" because they make the enemy go blind.