Right. This is a tangle. So let's start with the beginning:
ON FIRE IS A TERRIBLE EXAMPLE TO USE FOR CREATING AN ASPECT ON SOMEONE WITH CREATE AN ADVANTAGE
I can maybe trace it back to Spirit of the Century, where it was the first sample Aspect to show up in a section that was then called "maneuvers". But it was an example of setting difficulty, and it was created in the environment, specifically by throwing a lantern into a hayloft.
How the heck this has turned into the one thing everybody reaches for when they go "oh, you can also create aspects on the people you're fighting, like, uh..." I cannot explain. It's a horrid running joke at this point, to the extent that one of the first sample campaign settings created for Fate Core was about fighting the aspect On Fire. In the environment, because you're firefighters.
So why's it terrible?
Create an Advantage doesn't let you hurt someone. If you want to hurt someone and maybe put an aspecty thing on them, make a regular attack and hope to get a boost or, better yet, inflict a consequence. You can cash out as many free invokes as you want on a single attack, so Create an Advantage is a great way to set up for a giant burst of damage, but actual pain? Not so much.
On Fire is way more setting-dependent than most people realize. An aspect like "I Lost Him!" applies at pretty much every power level below "omniscient cosmic consciousness". But what "On Fire" means to someone who's got it stuck to them is wildly, wildly different. Above the point where you need special subsystems to deal with it, you've got cinematically On Fire, where it works like any other advantage and can get the free invokes pried off to mess with anything you're doing that being on fire distracts you from; heroically On Fire, where something on you is burning and it ain't no thang but it might cause trouble in your immediate vicinity if you can't deal; and comedically On Fire, where it works to your advantage because ninjas can't grab you.
So it's a highly variable effect that goes against the spirit if not the letter of Create An Advantage and almost certainly needs some kind of subsystem glued to it to do what people conceive of it as doing. To the collective body of Internet persons reading this: please, please, don't pull it out to be an example of anything.
MvK is a little more reasonable than you think it might be.
If you succeed with style and put an Aspect on somebody instead of a Boost, that's basically creating a half-strength Consequence on them. It "absorbed" one shift of damage and they can try to get it off this scene. But while it sticks around, it's another vector people can always bounce Fate Points off of to put damage on something, since you can only bounce a genuine Fate Point off a relevant aspect once per aspect per roll, and "Ongoing Damage" is always relevant to hurting somebody.
The Kaiju stunt that turns that Aspect into an attacker as well? It's basically saying "you did a great job on that attack, so here's a clone of you that lives only for violence". Action parity is a pretty big deal in Fate, so creating more dudes on your side mid-fight is a powerful ability, especially if you can do it without even giving up your action in the first place.
High Fantasy Magic and the Balance of Creating More Dudes
To illustrate the emphasis Fate places on action parity, you can take a look at High Fantasy Magic, an extra plug-in where summoning fire lizards to chomp on your enemies is just an aspect permission away! ...kind of. You can just say you have the ability to mess with fire at character creation, and that does gives you the ability to Create an Advantage to create an Aspect representing fire lizards, which is capable of taking actions.
Except they start with all skills at +0 and if they act "independently", giving them orders uses up your action.
You can sink some stunts into making them better, but even then they can't really come up to being on par with you; the main benefit to bumping your lizards' skills off +0 is that any +1 or better skills they have let them give teamwork bonuses to you, or anyone else, they help.
Ultimately not a fruitful direction, given that you want to have a bounty hunter incendiary out there doing damage while the bounty hunter is running for cover.
So, if you haven't already come to some kind of conclusion on a mechanic to use, let me present:
Three Ways To Burn Someone
OK STOP DOTS: Just attack and inflict stress normally, and narrate it as being something that causes gradual damage. Actual damage over "time", defined here as "successive exchanges in one combat", is ridiculously overpowered given the way stress boxes work - four 1-shift hits will take out an entire 4-box stress track, but a 4-shift hit will only take out the top box. You don't get change back when you spend a box that's bigger than you need, after all. Combat exchanges themselves don't represent any actual amount of time other than "however long it takes the camera to get around to showing what everybody's doing in the fight scene", so your "damage over time" could probably just burn itself out over the course of an exchange as a single normal hit.
The bounty hunter Attacks with Weaponry (or whatever appropriate skill) to inflict stress normally, and its nature as an incendiary informs the kind of Boosts you create on a tie or success with style. Their scramble for cover is represented as their Defend against whatever Attack the Sith Lord is trying - succeeding at a Defense against Weaponry with Athletics means they successfully eluded the Sith, and their incendiary burned out so they're up again.
Yeah, it's probably not too satisfying, but it is simple.
THE SLIGHTLY EXTRA WAY: So, supplemental actions had previously been kind of a thing back in the Spirit of the Century days, for when you had to fight ninjas while crossing a tightrope or whatever. The toolkit implementation in the link is useful because a supplemental action costs one negative boost to your attack. And what's a stunt if not a way to spend a single Fate point under very specific circumstances?
Space-Greek Spacefire. You have access to a nasty slow-burning concoction. When you Create an Advantage with Weaponry and place an Aspect on your opponent representing its effects, as long as that Aspect stays active you can Attack that opponent with Weaponry in addition to taking a Supplemental Action. If this action is an Overcome or Create an Advantage Action with a different skill, it does not apply the usual Supplemental Action penalty.
THE SLIGHTLY MORE EXTRA WAY: I've had some success with this kind of approach in my experimental games, as far as imparting the "feel" of various effects goes, but I've never really written it up for a wide audience. Maybe it'll be useful to you. Anyway, you know how Fate Dice are actual physical objects?
Flaming Weapon. When you successfully succeed with style on an Attack with Weaponry, you can give up a shift of damage to place an On Fire:2 aspect on your opponent, instead of a boost.
On Fire:N. When you have this aspect and take any action on your turn aside from trying to put out the fire, replace N of your Fate dice with Burn dice (Fate dice of a different color). On Fire's N goes up one point for each + on the Burn dice, and you take an S-shift hit, where S is the number of - on the Burn dice. Successful Overcomes against On Fire reduce N by one point for each shift of effect; when N is 0, you are no longer On Fire.