The ax may have been used in a ritual but I don't think it is a ritual ax.  It looks fully functional.  a lot ritual weapons and tools were not functional.  They were made either a lot smaller or a lot larger than the actual weapons or tools.

Thin butted means the back of the head is not as thick as the cutting blade end.  When you are digging a hole in anything, it tends to narrow as you get deeper.  Thin butted makes putting a haft on it much easier.

It is a celt, it is wider at the cutting end, it only touches the top and bottom of the hole that is cut through the handle.  So, as you chop, the head is jammed tighter and tighter into the handle.  So, as the head compresses the wood grain at the top and the bottom of the hole, it wedges in and friction is increased and just friction holds the  head in place.  You can easily knock it out by whacking on the base of the head.

Salt water and lack of oxygen will do that.  What you have to be careful with is when it dries out, it will usually crumble into dust if not preserved properly.