Dropped by
not really a weapon
The gun has no damage type of its own and cannot be reforged, so nothing in your loadout changes what it does. The flares count as ranged for buff purposes but the hit that lands is classless. That sounds bad and mostly is, except the flares pierce and set things alight, which covers the two situations that matter early: Blood Moon crowds and worm enemies. Fired down the length of an Eater of Worlds or a Wyvern, one shot connects with every segment.
light that lasts
A Flare sticks wherever it lands and burns for ten minutes, twice as long as a Glowstick. Firing one into the wall you are tunneling toward keeps the shaft lit as you descend. In multiplayer it carries far enough across a map to work as a genuine distress signal, which is more or less what a flare gun is for.
the projectile cap trick
The game holds a hard limit on how many projectiles can exist at once. Because flares last so long, you can stand in an arena before a boss and dump a thousand of them into the walls until that limit is full. The boss then has no room to spawn its attacks, while your own weapons keep firing. It is tedious and it looks ridiculous, but it works.