A nail bat is the upgraded version of the baseball bat, the nailbat is crafted from the baseball bat and is somewhat different from the traditional baseball bat.
After the fire axe, the nail bat is the most efficient combat weapon. The nail bat has greater damage than the regular old baseball bat (1-3 hit kill), with the same reach. But it has some drawbacks, its knockback is somewhat reduced and its durability drains faster than the regular bat. Despite all of these differences, the nail bat is a good primary weapon if one doesn't have a fire axe.
Putting a hammer, a nail, and a baseball bat into the crafting area will give you the nail bat.