Dropped by
your arrows stop mattering
Everything you load comes out as a shadowflame arrow, and every special property of the ammo you paid for is thrown away in the process. Ichor, holy, jester, none of them do their thing here. The only stat that survives the conversion is the arrow's base damage, so the correct answer is either the highest damage arrow you can make in bulk or an Endless Quiver so you never think about it again.
shooting it
The arrows are slower than they look and drop more than a normal bow's, so leading a moving target takes a few volleys to calibrate. They punch through a couple of enemies before stopping and leave a burn behind, and on a long fight that burn is doing a real share of the total. Fired straight up they travel absurdly far, which is only useful as a party trick.
when to use it
Goblin Warlocks only appear in a Hardmode invasion, so this shows up right at the start of Hardmode and is one of the better ranged options available before the mechanical bosses are dead. It ages out once you have proper hardmode arrows worth their special effects.