And I can't think of too many in-game uses for the Hand of Mercy. It almost seems like a ribbon.
Edit: I misread. The below analysis is for Hands of Healing, not Mercy.
I'm digging the Iron-Monkey-meets-Plague-Doctor vibe of the subclass. And I actually like that particular ability.
I agree that, on its own, a few points of healing on its own is not a great use of an action or a Ki point mid-combat. But it's a way to convert leftover Ki to party healing before a short rest, which saves HD.
And more importantly, what makes it really useful in combat is the added ability to
use it as part of a Flurry, replacing one of the bonus attacks for a Hands use for no additional cost. (Flurry already costs 1 Ki anyway.) So instead of just spending 1 Ki to only use Hands, this means you're spending that same 1 Ki point to do a full standard no-Ki Monk attack routine (Attack + Extra Attack + Bonus Attack)
and use Hands to toss in a bit of healing to boot.
Plus, at 11th it eventually becomes somewhat similar to a Paladin's Lay on Hands, in that it can remove some debuff conditions.
So this would be useful for the Monk to use to continually top off themselves or the party Tank in battle, and remove debuffs as needed. Especially when combined with something like the Mobile feat, so the Monk could hang just outside melee range, then on their turn dart in, attack 3x, toss a few HP and remove a debuff on a frontliner, then dart back out of range without drawing OAs.