It grants the capability to place poison in grog barrels, which, in turn, kills any Uruk who drinks from it. It also turns the surviving "healthy" Uruks against each other, accusing one another of committing the crime.
The paranoia effect is rendered ineffective, however, if Talion is caught poisoning the barrels before any Uruk have taken a drink, leading other Uruk to avoid the barrels altogether.
This ability can only be gained through The Outcasts main quest. No ability point is expended to gain this ability, as it is automatically unlocked during that mission.