Well, the effect of the TARGET_FAERIE_FIRE status type is set in GameData.ini:
Code:
WeaponBonus = TARGET_FAERIE_FIRE RATE_OF_FIRE 150% ; If shooting at someone marked with Faerie Fire, shoot faster (we don't miss ever, so can't hit easier)
If you change RATE_OF_FIRE to DAMAGE, then anything that is shooting at a target that has this bonus will do 50% more damage. You don't need to specify this in Weapon.ini (unless you want a WeaponBonus upgrade but that's another matter).