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I thought of this idea to be more for like an extra benefit to having a damascus blade. You could light the blade on fire and it acts like a torch, and then maybe you can attack once or twice with the flame on blade before it dies out and turns back into regular sword. But only for damascus steel given the quality. I don't know how much a pain it would be to code, but definitely fits the theme when such tactics were used.

Adding damage modifiers (fire or otherwise) to swords seems like something that has the potential to unseat combat balance.

Damascus steel isn't any more flammable than regular steel.

And swords already have a significant advantage over every other weapon due to their damage dice, ability to be sharpened, and nigh-exclusive range of medium.

And setting a sword on fire (or any metal weapon on fire) would destroy the temper of the weapon, making it break very, very easily.

Now if we want to get into swinging torches around for fire damage... improvised skill always needs some loving.

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For some reason I thought this was already coded, but apparently it isn't. In the same vein of temporary scary weapon enhancements, how about poisoned blades? I love extra sassy danger points for herbalists.