I'm not aware of official rules for that specific case. As far as making reasonable rulings for such shots is concerned: A big penalty to making the hit is appropriate. Damage should be reduced or negated depending on armor type, with only slight reductions compared to a regular arrow for unarmored/lightly armored targets.
This blog entry details shooting with headless arrows. It points out that...
- Even without its head, an arrow will still either penetrate flesh (if broken off jaggedly or otherwise pointy in some way) or cause considerable blunt trauma.
- Precision is indeed negatively affected, to the point of being mostly luck, even on short distances.
I then stood back to 20yards[...].
The arrows with the cone taper and the broken shard both penetrated the shoulder into the vital organs, and sank with ease to a depth of 6”, but the arrow with the head that had broken off square bounced completely off the same shoulder area of the body.
I then systematically shot at the head, throat, shoulder, ribs and stomach areas of the carcass, and every time this particular arrow simply appeared to bounce off. On closer inspection of the carcass, the impact had fractured ribs, and on the stomach it had ruptured the peritoneum – even though it had not pierced the skin.
This meant that tremendous Blunt trauma would still have been inflicted to the body tissue
However, with all 3 arrows, accurate placement of the shot was almost impossible, and it actually took me many shots to hit the carcass in the exact spot that I wanted it to. The arrows flew so erratically, much to the amusement of my Farmer friend, who said to me “I would be hungry if I relied on you to provide dinner”. It goes without saying that I replied with an answer that only good friends can say to each other, but of course in many ways he was right.
So, in all likelihood the elf's plan would fail miserably, by either severely injuring his comrades* or by missing entirely.
*Armorbreaking capabilities of a headless arrow will be greatly reduced, obviously, so that might be helping some of the poor sods that are being shot at.