It should work like Chain Lightning; I think the issue stems from the fact that Chain Lightning was changed in 3.5 (which is when Warlock was introduced as a class) to deal half the damage of dealt to the primary target, whereas in 3.0, it dealt half as many dice of damage as the primary. NwN uses 3E's version of Chain Lightning, and Eldritch Chain is also based on that. I'll adjust the text to clarify it halves the dice, not the damage from the first target.