Is it possible for a weapon to gradually lose damage over time when it's on automatic? For example, the spread of a weapon increases when you fire for a long time, but then it restores when you don't fire. Is it possible to do the same with damage?

Uh...no, not without a decompiler and legal permission...

AFAIK there is no way without finding out how to create a new powerup life the Imp Officer's Attack buff, and have several hundred of them. But even still, there is no even for when you fire a weapon, unless its a drop-able.

Aww... so there's no:

SpreadPerShot = "1.2"
SpreadRecoverRate = "4.8"
SpreadThreshold = "1.6"
SpreadLimit = "5.0"

for damage?