Steel on Bone is a slow-motion sequence that comes up at random as you strike enemies in Story mode, with lower difficulties increasing the rate at which it appears. It can be initiated with both and attacks and the rate at which it will activate is increased as the enemies enter near-death states. This enemy state is indicated by blood on their character models. Another method to trigger this attack is to use the Slide on a staggered or weak enemy to launch them into the air, followed by pressing to initiate and end the Steel on Bone sequence. You will undoubtedly have this by the end of your first Story mode playthrough.
This is also obtainable in MP, but an enemy must have a flashing red health bar to initiate it. Ninja Trials are another location to earn progress towards this achievement.