I've noticed that the prism will not work on my DoT spells, even if I already have them set up for the full run of the spell. The prism will turn the first hit to ice showing a boost on fire enemies. However the DoTs will take other prisms but not change, the enemy will resist as if it were a normal fire spell.
For example, in the fight with Viktor Snowcrusher, I will set up my prisms. When using Fire Dragon, the firebreath will be transformed into an ice spell with the damage resulting around 1000 up. The dragon DoTs even though eating the rest of my fire prisms will just show as regular fire damage and hitting Snowcrusher for only 40 points.
My DOT (Damage Over Time) Poison spell uses Prism but only when I first cast it. The first cast of Poison without Prism is 35 but Prism increases it to 52 but it doesn't continue to have the Prism effects over the next 3 rounds so those are regular Poison hits.
None the less, it does use Prism.
I retested by putting 4 Death to Life Prism on a Death school enemy and then using DOT Poison and I get the same results as the original poster.
The Prism is used by Poison on the first hit increasing it from 35 to 52 but the next three Poison hits use Prism, it says conversion takes place but there is no more damage than the 104 which is the same hit I would get against a Death school enemy by using Poison without using Prism.
The Prism should increase the 104 damage against Death school but it doesn't.
If what you did was set up four prisms before casting your spell, it seems to me that you have a valid point, if the second, third and fourth fire damages did not convert to ice -- have you sent in this information to Help & Support? It seems like something they need to have some programmers take a look at.
KI has seem to skip over aura spells. If you inflict ice damage from the beginning hit, then the WHOLE THING should be ice. Why have fire damage when fire damage wasnt done during the incoming? Same with death to life, ice to fire, etc.
I hope that the prism-bug gets fixed soon. It's annoying in longer battles against a same-school boss - especially if you're a Pyromancer...
About the Scarecrow, however: A spell only consumes blades on the INITIAL cast - traps/shields are consumed on every hit of the targetted enemy. So a DoT spell would only drain your blades in the round you cast it (the additional damage, however, is applied to every tick of the spell), while the traps on the enemy would be used every time it takes damage.