So how the customization extra damage works?

Self-explanatory, to what the +20% dmg from customization affects? Base damage only? Bonus damage from skills only? 20% of (weapon dmg+bonus)?

Wondering if it's worth it in some weapons...

This.
It increases base weapon damage: no more, no less.

20% bonus to base damage.

I think it should be used with Martial weapons

but you'd think only a crazy person would use it on staffs/wands

i use it. i lick my elbows rawr

If u know urnever gonna sell the weapon,customize it coz every little bit helps.

On the other hand, wouldnt customize a caster spear coz 20% of 2 damage...well u dontsee it. Not worth it on a caster spear.

I think customize should have 2 options. Either 20% dmg or add an inscrip slot

But yeah Base Damage

well your a "Special" one arn't you

I use it simply because I like feeling like i've claimed it as my property!

Seconded... If someone steals my account, they won't get my silverwing (or other junk)... as simple as that...

Yes I customize my stuff all of the time. Mostly I Craft a weapon that I want. for 5K you can have the best req9 weapon in the game. The skin will not be the best but who cares.

so sword max dmg at 22 (ignoring attributes) with the 20% dmg will yield 26 base dmg if you customize it. If you add a 15% mod while health is above 50% then that 15% appears to be on the BASE dmg of 22 NOT the 26.

It is not accumlative. I think that is the question.
So 22 + 4.4 + 3.3 = Sword with above specks is Dmg 24-30

NOT (22 + 4.4 )* 3.3) = Sword with Dmg 24-30

Well it would appear that your weapon would have to do more than 22 dmg max for there to be a difference.

Lets try Hammer at max of 35.

35 * 20% + 35 * 15% = 35 +7 + 5.25 = 47.25 (note 25 does not round up so 47

35* 15% * 20% = 48. So you get 1 extra point of base dmg more. This is an insignificant number.

So the answer is, it does not matter.