by Billgrant
The Unofficial FAQ that Jack mentions is in complete contradiction with the English rules from Iello.Thematically I think of the fire breathing as accidentally burning neighbors slightly. It only happens when an attack actually works (e.g. Monster in Tokyo hits someone outside, or vice versa) because that means the attack wasn't completely neutralized, and at that point one damage is done to those neighbors regardless of where they are. This isn't considered a new hit so there aren't additional additive effects on top of it.
I suppose the FAQ could be changing the original rules (maybe the card was too strong) but if that is the case it should say that.