From another thread with the same question:
They actually fixed the bug that had existed for so long. It used to have a lasting effect of some sort in the Beta, but the idea was removed. They forgot to remove the icon though, which they finally did in the latest patch.
(According to the developers, it wasn't worth making a patch just for such a small change)
Pretty much, it does exactly what it says in the skill icon, and nothing more or less.
In reply to your concern about the damage, it relies on how powerful the mob you are fighting actually is. Against 4 star chaos mobs, you would expect to see 1-2k hits, whereas 5 or 6* bosses are hit 3.5k+ constantly, usually 4-4.5k.
A mage at heart... Fire mage that is.
Currently actively playing the game.