20a field you place, not a shot you land
Firing it lays down a long curving rainbow that stays where you put it for most of a minute. Anything touching it takes rapid repeated damage. You only get one at a time, so pressing the button again deletes the first one, and the way to use the weapon is to fire once and then switch to something else while it works in the background.
aiming the curve
The path is predictable once you know the rule. Fired flat it runs a long way before it starts bending downward. Fired at a diagonal it begins curving almost immediately, which is how you drape it across a small area instead of stretching it over half the map. Fired straight up it never rotates at all and simply leaves. It also slips through single block walls at certain angles, so you can lay a field on the other side of a floor without opening it.
the lock
Every one of those rapid ticks carries a little knockback, and the result is that enemies walking into the rainbow stop walking. Groups pile against it the way they pile against a Vilethorn. It also handles segmented enemies unusually well, since every segment of something like The Destroyer crossing the line is a separate target taking its own hits.
the critical strike rule
The rainbow reads critical strike chance from whatever you are holding at that moment, not from the weapon that fired it. Since the whole point is to fire and swap, the gun's own critical chance mostly never applies, which is why Ruthless is the roll that helps. The same rule means that swapping to something with high base critical chance, such as the Stellar Tune or the Staff of Earth, hands that chance to the rainbow instead. Reforging this is expensive, and the middling damage rolls all perform identically as long as you never hold it.
getting it
It is not a random drop. The Hallowed Chest in the Dungeon always holds it, and that chest only opens with a Hallowed Key, which only starts appearing after Plantera is dead. A normal world gives you exactly one. The Rainbow Road seed is the exception, stocking it in most of the other biome chests as well, so one world there can hand out a handful.