Formula is (weapon damage * 2 ) +1. It will only apply if your pets innate damage is lower than what the formula gives which is why the pet started hitting 35s with a 17 damage weapon. AFAIK delay is unaffected and weighted axe is the only weapon nerfed by this (pet simply will not equip it). Not sure if there is a cap but good weapons to do this with are cheap 2handers like the baton of faith.
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