The Broken Butterfly can be purchased starting in Chapter 7 for 42,000 Pesetas, upon entering the Castle. It can be sold back for 21,000 Pesetas. At this point the Merchant offers a 30% discount on the Broken Butterfly, meaning you can get it for 29,400 Pesetas, and he will include the Magnum Ammo Recipe for free.
Excluding the Rocket Launchers, the Broken Butterfly has the highest Power of any weapon in the game, after Exclusive upgrade. That pretty much tells you everything you need to know about this weapon's purpose, it is a boss and mini-boss killing machine.
However, it is worth noting how expensive it is to reach that maximum Power point, though it is similarly expensive if you decide to wait to upgrade the Killer 7 instead. I would say most players should take advantage of the Chapter 7 discount on this weapon and use it for their first playthrough.
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