If you are running multiple piercing mods with different reduced damage %(This only applies to Shotguns if you have all your mods at V) then the game will take the lower of the two. For example if you're running one piercing mod with 40% reduced damage while piercing and another with 30%, then your damage is reduced by 30% while shooting through objects.
If you bring AP Rounds and a piercing mod, you still deal reduced damage based on the piercing mod.
If your gun has natural penetration on it, it will never deal reduced damage regardless of mods.
A side note about Guardians:
Shooting their shield with a damage dealing ammo power on will cause the ammo power to deal damage to the Guardian, even if you did not pierce the shield.
If you did pierce his shield with ammo powers on, then the ammo power will hit twice. This means if you're using AP Rounds without a piercing mod(Or any damage dealing ammo power on a gun with natural piercing)you do more damage by shooting his shield than you do mailslotting or flanking him.
Note: Incendiary Ammo does not get applied when shooting the shield, or even through the shield with piercing.
Edited by Cyonan, 27 January 2013 - 10:33 PM.