I'd probably see it used about once every session or two, on average. It's usually the more tactically minded players that use it.
Personally I used it last time I was in the DM chair... Cloud Giant has picked up an unconscious PC (one of two); he dangles the dying PC over the edge of a huge drop and says to the other two PC's, something like, "OK, let's discuss, or this one dies"... I then readied an action to drop the PC if anyone attacked the giant. Of course, you can probably guess what happened next.... said player is creating a new PC.
Personally I used it last time I was in the DM chair... Cloud Giant has picked up an unconscious PC (one of two); he dangles the dying PC over the edge of a huge drop and says to the other two PC's, something like, "OK, let's discuss, or this one dies"... I then readied an action to drop the PC if anyone attacked the giant. Of course, you can probably guess what happened next.... said player is creating a new PC.