LogFAQs > #878938454

Effects: This Form halves the damage Zero suffers, negates the knockback he receives completely and increases the power of his Shield Boomerang, at the cost of decreased attack power for his other weapons. Thankfully it doesn't affect the damage output of the charged attacks or EX Skills.

Doesn't really say how much it hurts his offensive output though beyond that "it does" so in terms of the game it just means he does less damage per hit or whatever.
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Heck, the wheelchair might even become an asset- Proto or Auron shuttles him around while he blasts away. - Tom, on crippled Ryu
http://i.imgur.com/tosbd7k.png