@Becky is correct the wafer paper maybe edible, but it is a very bland. It is also thick and difficult to cut through if you use it as a cake collar. It sticks to a surface, but doesn’t meld to it. So cutting through a cake wrapped with wafer paper can be a bit difficult.
I took a wafer paper decorating class about three years ago. From that experience I feel the best application for wafer paper is for decorations like flowers because they are thick enough to hold their shape. But if you want a realistic flowers it’s better to use gumpaste.
The best images for cake are printed on icing/frosting/sugar sheets. Although wafer paper can be used for such application, but as I mentioned above, wafer paper does not meld to the surface it’s applied to so difficult to cut through if a cake is wrapped in it.
Icing sheets are made from a very thin layer of icing. It’s not as flexible and you have to apply it to something, you can’t make a flower out of it like you can with wafer paper It has a sweet taste. It also produces a sharp image. In fact you can create a photograph image on it They are more expensive, and they must be stored properly and used within a reasonable amount of time least they dry out and become useless. And the nice thing about icing sheets is once you apply it to the surface it will melt with it. So it’s just like slicing through regular find it or icing.
The other important distinction is applying it to cookies. Suppose you get an order for a cookie with a company logo and they want the image applied to an an un-iced cookie. The icing sheet will produce an exact image and it will stick to an an un-iced cookie. If wafer paper is used you will have to apply to royal icing because it will not stick to a bare cookie.