Willie Pete is only a chemical weapon only in the sense that it is a chemical and it is a weapon. By that standard, napalm, flamethrowers, FAE, and even plain old HE are chemical weapons.
WP burns through an oxidization reaction-meaning it produces heat, a lot of it, on contact with oxygen. It's mostly used nowadays because it produces thick white smoke, which can be used as an obscurant and is also a mild irritant. In other words, it'll make you uncomfortable, and don't just hang around in the stuff. Not much different than any other kind of chemical smoke-like the hand grenades that make pretty colors. Just makes a lot more heat doing it. Oh, it also can be used to scare BGs into thinking it's something nastier, especially when combined with good psyops.
And there's a world of difference between catching civilians with the effects, which happens no matter how hard you try, especially when the bad guys refuse to obey the rules and wear uniforms like proper soldiers, and deliberately targeting civilians. You know, like detonating a car bomb in a makret, or at a Shia shrine.