One of many things that confuses Demons about the Empire is their use of flaming arrows. It’s not confusing that the Empire uses flaming arrows; it’s confusing that they only use them sometimes. As far as Demons are concerned, flames make everything better, especially weapons, so why would anyone ever choose to use arrows that weren’t on fire?
So yes, Balbech is not part of some specialist archery division within the Demon army, and he doesn’t only get deployed when the enemy are hiding in flammable thatched cottages. Flaming arrows are standard issue for Demon Rangers. And when they want to add a little spark to their attack, they make them explode.
Exploding arrows, like most Demon abilities, are particularly handy against formations that are bunched together. If Balbech is focusing on an isolated target when his special ability kicks in, it’ll make no difference at all. But if his target is in the center of a group, it’ll increase his total damage many times over. This skill is also especially effective when combined with attack speed buffs, which allow Balbech to fire off even more exploding shots during his 8-second window of opportunity.