Only affects insect spirits. Other targets take no damage from this weapon.
Due to it's low ammunition count and damage, higher difficulties require you to bring along all three equipped characters in order to messily bring down bugs. Neither of the two npc's are heavily specialized in guns, and even the pc may be inaccurate with it depending on skills.
It takes three hits to kill a bug spirit, getting those hits in a single round before it reforms can range from annoying to rage inducing.