For bullet pen, 1 is full damage and anything below that will scale the damage based on the new value. Your first hit never factors in bullet pen, so always full damage. Once the bullet hits a target, deals its damage AND still has bullet pen left, it continues through and repeats the process. Anytime we have 0 pen. the bullet stops.
Bullet pen values that exceed 1 will continue to deal full damage until they are sub 1. So a Barret with extra bullet pen buffs will just explode through everything at full damage.
Everything you hit has bullet pen defense which is subtracted from your pen value (commons are .25, I think specials are 1?). Most walls stop all bullets.
This site is really awesome. I am going to see if I can get you more specific information that should make your life easier.
No AA12 nerfs in the pipe. The trade off for that weapon is needing to feed shotgun shells into that beast.