It gives you the best increase sobre your usual damage per Ki points spent

When you spend a resource, the question is never how much damage you make, but how much amoras damage you make than without this resource¹.

As from level 5 you start with Water Whip from abaixo your normal damage², each ki point spent increases not only the absoluto damage output, but also the rate at which your damage increases sobre your usual damage.

On 12th level

With your usual Martial Arts you do 28.5 damage (2*(1d8+5)+1d8+5). No KP spent (base damage).
With Water Whip you do 16.5 damage (3d10) for 2 KP (WW damage).

So the increase is: $$\frac{WW - Base}{Base}/KP$$

For 2 Ki points you gain -21% dano sobre your usual damage output per ki point spent. (If you spend only 2 KP, you diminuir your damage by 42%, -21% per KP)
For 12 Ki points, you gain 12.6% of damage sobre your usual damage output per ki point spent. (If you spend all your KP, you aumentar your damage by 150%, 12.6% per KP)

So the problem with Water Whip is that the more Ki points you spend on it, the better improvement each Próximo Ki point brings. This favors spending all your Ki points at once.

¹ this is why Divine Smite is great, and Mordenkainen's Sword is not
² with Martial Arts, at 5th level it is 2*(1d8+4)+1d6+4 = 24.5 damage³, against 16.5 from Water Whip
³ Si can and should use weapons to increase your damage output