Scorpion Woldol is Woldol's transformed state or 2nd phase of the boss battle against him. His transformation happens just before a second fight begins regardless of when you defeat Woldol during the battle. In this form he can perform physical attacks, as well as use the Demon Breath attack. On top of this, he is immune to all damage until you give the Sword of Hajya to Nick and land a melee attack on him with it to break his defense.
When this attack lands he sprays a poison at Nick, infecting his right arm. From this point on, even if you egress from the battle and redo the 1st phase of the battle, Scorpion Woldol's defenses will remain shattered and other characters will be able to attack him from the beginning of the battle, however, the Sword of Hajya will have to be manually passed mid-battle back to Prince Nick and won't remain in his inventory when you return from an egress.