Puncture hits the target for weapon damage. It then applies a Damage over Time debuff to the target. These are separate things. It's not "double dipping", it's two separate instances of single dipping. There are two instances of damage being dealt, and each is affected by a separate set of modifiers. There is some overlap in those modifiers, because some of the modifiers are global. Physical Bow Attack damage is Physical Damage - so the base damage value is affected by increases to physical damage, and the final damage is mitigated by physical damage mitigation. Physical Damage over Time is Physical Damage - so the base damage value is affected by increases to physical damage, and the final damage is mitigated by physical damage mitigation. This is consistent with everything else in the game, and changing it would either make it inconsistent, or change those things so that they didn't make sense. Should increased chaos damage not apply to Poison Arrow's cloud because it's chaos damage over time? If you have added chaos damage supporting the gem, should that increased chaos damage then only apply to the hit damage, and not the cloud? Should Ignite not be affected by Fire damage increases? Despite the fact it will be affected by fire resistance? Puncture isn't going to get arbitrary special treatment to make it work unlike all the similar things in the game - that would be inconsistent and confusing. The current system makes sense and has all damage of a type be affected by modifiers to that type of damage.

Well, formatting bugs ate a bunch of my post, and I see the thread progressed a bit while I compiled it, so I'll see what I can recover and then repost an updated version here at some point.