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.