Damage increase is additive with other damage mods like Hornet Strike.
The damage increase is not applied on the hit that procs a new status effect, it is only applied on following hits.
For example: Galvanized Shot has 2 stacks, weapon has 100 base damage and Hornet Strike for a total of 100 * (1 + 2.2) = 320 damage. First hit procs Impact and deals 320 damage. Then on the following hit the +80% damage from the 2 stacks is applied for a total of 100 * (1 + 2.2 + 0.8) = 400 damage.
This makes the mod ineffective on low Fire Rate weapons aiming to kill enemies in 1 shot.
When the buff times out, one stack is lost and the buff duration resets.
Only kills from a weapon equipped with this mod will give stacks, and only the weapon equipped with this mod will benefit from the buff. If equipped on both a normal weapon and an Exalted Weapon, it will affect both weapons.
Kills from status procs (including from Hunter Munitions) from a weapon equipped with this mod will give stacks.
Bonus damage from status procs may originate from any source, including primary and secondary weapons, Warframe abilities, companions, other players, or the environment.