I belive its direct damage. Like pain spike or armor ignore . Though it is lower damage than either of these you can get both fireball AND velocity on the same bow. Meaning you can have 3 numbers float above your target instead of 1 or 2. In PvP i think it cap about 8-10 and usually lands for 4-6. In PvM ive seen 14 as my personal high.
Someone might have better numbers than these.
Those are nice approximate numbers and will give you an idea how it works. Like 5% said, it is just direct based damage. The farther you are away from your target...in terms of tiles, the more damage you will be able to do...provided you hit your target, AND the property kicks in.
It is just + 1 for every tile between you and your opponent.
Nice desirable feature though for stacking weapon spell damage and hit velocity.