"BL" is an abbreviation of "Boy's Love", a genre of romance novels. Several Hololive members are fans of BL novels. Although the reference can be attribute to multiple talents, the specific implementation likely inspired by Houshou Marine and Hoshimachi Suisei.
Marine is known for her appreciation of BL work[1] and is referenced with the sprite design.[2]
The gameplay function is likely referencing Suisei, who has previously used her sister Anemachi's BL books to ward off ghosts[3]. This also explains why the BL Book collabs with the Psycho Axe.
This weapon is a direct analogue to Vampire Survivors's King Bible.
Gallery
BL Book as seen in combat.[2] Note the obvious Marine hat compared to the icon version