You have no natural hard striking surfaces. All of your normal blows, whether from punches, kicks, or delivered by strikers, do an additional -1 point of damage per die. This reduction to damage does not apply to melee weapons you might wield, and you can get around the limitation by wearing brass knuckles, picking up a rock and punching with that, and so on. Octopuses, slugs, and worms are all examples of creatures with this trait.
This disadvantage is mutualy incompatable with the Claws advantage. It has no effect on biting - if you also lack hard teeth, take Weak Bite (no bite +50%) [3]. Being soft qualifies you for a -20% limitation on the cost of any Extra Arms or Extra Legs you might have.