Higher velocity is only useful to a point then the bullet does less damage and passes through That is correct, however at much higher velocities, you get, at least in theory, a hydrodynamic shock effect. Since a human is made up of mostly water, and cells are effectively bags of water, a hit at hyper velocity can cause a ripple similar to dropping a stone in a pond. In this case though shattering cell membranes and doing serious damage.
The lethality of Honorverse pulse projectiles are space-opera-ized.
Flesh doesn't transmit shock waves like a fluid. The effective viscosity of cell walls and internal membranes is surprisingly effective at damping shock waves. The shock effects are limited to a narrow cone, and higher velocity makes the cone narrower.
Someone once speculated that shock waves could propagate through blood vessels to rupture the heart. That doesn't work either, as the shock waves either cause a localized blowout or get damped by repeated reflections off the vessel walls.
Everything I read says they are 4mm hollow point needles. You aren't goint to pack much of a charge in that. Doing so would not add much lethality and would render your ammunition unstable in flight.
There are chemical explosives capable of achieving great power in very small quantities, but they are naturally very dangerous to handle.
For example, pure crystaline Iodine is perhaps the most explosive chemical known, equivalent to
thousands of times its weight in cordite or similar compound. A crystal the size of a pinhead would be sufficient to make a lethal explosion.
The problem is that it reacts instantly with the tiniest amount of oxygen. Instantly. Tiny. Boom. You end up needing a binary component arrangement, an inertial arming mechanism, etc, and manufacturing it is going to be tricky.
A sufficiently advanced weapons industry can manage it. As a side benefit, an industrial accident becomes a tourist attraction. "I want my picture taken standing on the rim of the 1200m Astro-Arms crater. It's the biggest in the sector!"
![Wink ;) ;)](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)