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You should: Get Barbas, go see Clavicus Vile, get sent to get the axe, return to CV, quest completed.
https://en.uesp.net/wiki/Skyrim:A_Daedra%27s_Best_Friend
Note: The issue you describe is indicated in the bug section at:
https://elderscrolls.fandom.com/wiki/A_Daedra%27s_Best_Friend
Keep in mind, both Skyrim wiki's will offer extra information the other may not have. It is best to review both.
You could try removing the axe from your inventory with console commands "player.removeitem <axe id> 1" then after progressing the dialogue with clavicus, put it back into your inventory "player.additem <axe id> 1". Again, do everything else that might possibly work before this, because this might not work, in fact it could make things worse.
I had sometimes troubles if the dog wasn't close to me while talking to the statue.
Also, probably not the solution, but you can really only continue the conversation when he has finished saying his lines.
Reload the autosave when you walked into Haemar's Shame. If that doesn't work, reload earlier to when you collected the Rueful Axe at Rimerock Burrow; or when you entered the Burrow and defeated Sebatian Lort.
As Dead mentioned, make sure Barbas is with you. When conversing with a Daedra, you cannot skip dialogue. It must play out completely. (Sucks when conversing with Meridia or Hermaeus Mora).
Ooh yeah, Hermaeus Mora and Meridia both love to talk a lot. Real wind-bags. It's painful. I found out when I skipped dialogue on Meridia ending that instead of slowing lowering you to the ground, it autosaves at beginning of conversation and repeatedly drops you to your death. You basically get stuck dropping to your death over and over again.