According to the RealmEye wiki, the Seal of Blasphemous Prayer (commonly referred to as the "Oreo") gives -4 defense. I tested to see if this was possible using Pfiffel's dps calculator. It turns out you can have negative defense. So if you had -4 defense, would a 30 damage projectile deal 34 damage? What would happen?
The results are in! I equipped an Oreo on a 0-defense character for a total of -4 defense. The damage I took while I had it on was increased by 4 and was displayed in the regular red color. Purple text means armor-piercing damage, not just 0 defense; otherwise it would be purple when your shots damaged pirates or other easy enemies.
So basically, it does what you'd think.
The damage done by all enemies would be pure damage. And if I am not wrong, the damage colour would be purple. Pure damage is the damage ignoring the defence of your character. Negative defence would mean there would be more damage dealt to you than the damage done to a person with 0 defence.