There is a damage setting, but Taera says it doesn't work as you might expect, and recommends experimenting with 20% and 80% settings - he says 20% works better.
As of Gold Patch 3 though, multiplex tracking is working rather well. My impression was that no firepower was being wasted as long as targets were available.
And yes, SE3 target assignment is a much cooler system. Too bad it wasn't kept in SE4.
PvK