Unfortunately, I cannot help clarify the version 2.0 rules, but if you are looking for some small clarification about how to possibly handle this ability, I quote from "Vampire : the Dark Ages" (WW 2800 - 1997) per its description of Creo Ignem:
The flames cannot burn objects until they have been released by the Cainite.
Therefore a "palm of flame" does not burn the vampire's hands and create aggravated
wounds -- it only produces light. Once the fire has been released, however, it burns
normally and the character has no control over it.
System: The number of successes determines how long the fire may be "held" before
being released -- one minute for each success gained. The Storyteller may require a
Perception + Altertness roll to place the flame in the desired spot.
So the important bits seem to be:
The flames cannot burn objects until they have been released by the Cainite.
with
Fire conjured by The Lure of Flames must be released for it to have any effect.
and then replaced the system for control and placement. The synthesis seems to be that the flame is "placed" (appears in hand or elsewhere in line of sight) then "released" (i.e. allowed to do damage). Arguments against the "fireball" hypothesis (thought I have read online of people playing it this way) would be two-fold in my opinion :
Ranged combat for physical objects includes Dexterity (Dexterity + Firearms, Dexterity + Archery for Dark Ages)
Thaumaturgy disciplines involving moving physical object, transmutation or animation (Movement of the Mind -> 2nd Ed., Rego Aquam (water manipulation/creation), Rego Elementum ("earth" manipulation/animation) -> Dark Ages) do not rely on Alertness.
That said, the clearest argument for a "reach out and touch someone" strategy is Rego Tempestas (weather manipulation - Dark Ages):
When summoning a lighting strike the player must roll Perception + Archery to
attempt to hit a specific target.
But while using Perception, it still involves Archery (the Dark Ages version of Firearms). Also note that "place" is used in both versions, not "launch" or the like.
Granting the above (place and release), the intimidation tactic seems sound if you were to clarify the "holding" (e.g. prior to "release") phase, possibly with a second roll or some other system of your own devising. If your target could move, though, it might not work (e.g. the flames stay in roughly one place -- even if it was your hand, you might still have to catch your target. This is where Dodge comes into play.) Direct "attack" would obviously come from "releasing" the flame near enough a target to set it on fire.
Quenching is obviously not an option once control is given up, but I would think it would dissipate harmlessly if not in contact with anything combustible once "released" (e.g. mid-air, over stone, water, etc.) Quenching while in "held" form seems pretty much out of the question if you take the Dark Ages approach (e.g. you have a time limit on control before it "gets out of hand", so to speak.)
As it stands, the people I've played with have always used the Dark Ages rules with 2nd Edition soak guidelines if we felt we needed them. Note that we also generally allow placement behind objects (e.g. a partially blocked window) if there is line of site to at least part of the destination (higher difficult than unobstructed, though). Other guidelines and assumptions presented are pretty much the conclusions we have come to regarding our interpretation of this Discipline. So I guess you could call it our "house rules".
