Yes, that's what happened. I thought it was unlikely that I'd have hit all 5 of the other party members, but it looks like that's what happened.
At least for me it's mainly a cosmetic bug - text shows up on the character sheets, but it's not actually doing anything.
All of my companions have an icon next to their portraits, and an 'active effect' on the character sheet called Borresaine that says 'Steal x second duration from each beneficial effect on the target.' The character who's wielding it, however, does not. The icon and effect remain even if the weapon is in my stash.