Actually I believe the damage bonus should be bypassing the 300% DI cap.
Armour ignore damage from the players will not receive bonus or penalty.
The first hits receive a steep penalty which decays rapidly. After that the bonus builds slowly over the next hits until it caps at 20 %. Once at 20 % the next 5 hits maintain the + 20% damage rate. After that the focus builds up again from the penalty.
If all hits are doing equal damage, the damage output is just a little bit above even.
However, the levels are constant and predictable so a player can choose to take advantage of that damage increase.
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(So you could build up focus on regular hits, or low level quick spells, and then when you peak, Flame Strike, Crushing Blow etc... taking advantage of the larger burst damage)