A Cutter is a monstrously expensive and hyper-specialized unit, but that specialization is shooting enemies between eight and thirty two inches away and it's arguably the best model in the game at doing so.
This is why you take any TAG! Let's talk about what makes this one special vs just 'it's got armor and a multi-HMG' though.
Deployment - Usually when you're the active player you'd be leaving the TAG as your reserve mini anyway. TO does give you an option to basically pay an order [the one the TAG would generate] to be able to keep it completely off the table w strategos and what not. Where it really comes into its own though is allowing you to keep 1/3 of your points and SWC safe until a moment of your choosing whilst still playing to PanO's solid defensive game. Worth remembering: a crafty opponent will probably figure you're not deploying your TAG unsupported when they're planning their A-TAG game, that's something you can manipulate. Especially important when you're up against something that has an Oniwaban or other ridiculously potent anti-TAG weapon that they can leave in reserve and counter deploy with.
Mobility - TAGs can't cautious move, but when you can turn into a marker and power 10" without fearing ARO, and be hard to discover to boot.
Surprise shot - Remember you can turn into a marker, and you can use that to get an even bigger advantage in the firefight. With cover and TO, that's a potent -12 to hit. If you can add 'bad range' or even '0 band' to that, you're basically invulnerable. BUT you'd probably win most of those F2Fs with 15s vs 3s, and unless you're on your last point of S, you're probably better off using your orders to maximize the damage & prep for the next turn.
TO + Cover + Suppressive is brutal, as are TAGs on suppressive anyway. The Multi-HMG's huge band also means if someone tries to outrange you, you can go for your Exp round. BUT be careful doing this with Cutter. Missile launchers, esp on TO or visor troops can decimate you, and honestly if someone throws enough dice w an APHMG or the like, you'll feel it. It also puts you close to the enemy where smoke/melee, outflanking, and hacking are far bigger threats. Keeping yourself at range, and if possible as a marker will usually be the way to play. Remember markers cant be hacked, and unless you leave yourself vulnerable to a 'discover/shoot' you usually have some pretty decent options in play.
Also think about what else is in your lists: in Varuna look for that fireteam. Normally you might not think much about your combi-rifle monkeys, but their 360' fire, board coverage, and SSL2 will do a good job keeping away the worst shenanigans or at least tying them up. KHDs & Jammers also give you good out of LOS ARO options. Remember forcing someone to eat an ARO without F2F makes even weaker things like fusilier hackers more potent by far, or will force someone to split burst/use a weaker program.
Repeater coverage can also be valuable [your opponent would eat firewall mods to go after your high BTS TAG. For this PanO has one of the most unpleasant defensive options: the Peacemaker. Those powerful close in weapons can be an issue for anyone trying to crack the TAG puzzle, and they're fast enough to follow you up the field whilst being cheap enough that you dont care when they die. [I personally like them in a 2nd combat group]. Even better w supportware.
One last quick point: if you're in hidden deployment, try to think about a place where you'll be able to get a turn or 2 of ARO out of this beast. Your opponent will have spent most of their orders cracking the things they can see, and it gets you your order for next turn. Meanwhile without dedicated planning & the orders to maneuver counterpieces into play, you can chuck BS 15 D16 Exp rounds downrange. This is especially powerful if you can orient it along a different axis to your main defenses, ready to shoot them without cover, from terrible range, or as they start to feel safe/move fast instead of safe. IT does sometimes work as a backup piece though, right after your fusilier missile goes down, and they finally start advancing: they now have to deal with a very different threat that would take very different tools.
Varuna players also have access to the linkable Mechanist - this is excellent, specialist play + can fix your heavy hitter. Also syncs well with the bots which can form cheap backup killers, repeater support, and screening.
You have TO camo... yeah, marker state shenanigans and ridiculous mod stacking. That's the name of it.
Lacking a secondary weapon leaves Cutters even more vulnerable at close range than other TAGs. After using smoke to approach, melee and shotguns stand a reasonable chance of bringing down a Cutter.
Using an HMG or similar weapon with MSV works, especially through smoke, and a Cutter stranded in front of such a troop with nowhere to hide using Guts made a mistake. However it's hardly reliable, since a Cutter is still a normal TAG even if its TO is negated.
See notes in defense
You probably will have the points for one and only one another really heavy hitter, especially if you're building in the support you really should. Think about having at least 2 other cheap options as an alternative. This usually means doubling down on something you'd already be busy killing [Bulleteers and TO are both vulnerable to MSV... but honestly, Cutter works as a battle TAG. How many visors are going to be left when it finally dies]. OR stuff that goes a completely different direction: Cutter + Aquilla/Father knight/DeFersen is SUPER expensive, but you will have a different set of targets for each.
In Varuna ORC lead fusilier teams are a great balancing act. [Especially since unlike EVERY OTHER PANO Sectorial you have UNLIMITED AVA. So, take a missile launcher, then take a spare guy to make sure you still have +3 when they die, and another one for after your 1st Orc dies so you can still Crit on BS rolls w a BSG Orc. For a ref: You can take a Cutter, ML/Medic/3 Grunt Fusiliers + Zulu Cobra KHD + 2 Orcs [BSG & HMG] + a Machinist or a bulleteer. You'd probably be better off with something else, but that list has a BS17 HMG, an an ORC that will be critting on 23s after your Cutter dies. Could also take the Kamau HMG instead and get a Haris going too w the extra SWC/pts.
You should usually deploy a Cutter in Hidden Deployment, and unlike most TAGs not as your Reserve.
If you're going first marker state it unless you're taking strategos or are SUPER worried about an infiltrating/impersonating problem [looking at you Oniwaban/Hassassains]