When I played with this weapon I used some of the alien ammo and it was quite impressive. My question though is, does the damage fall off when you mod it to take energy ammo? Or does it maintain its performance? And I read somewhere that perhaps it crits all the time, this true?

No idea about crits, but if you convert it from alien ammo to regular MF cells you lose 1 base dmg.(thats for unmodded base weapon so even if you put other mods on the dmg diference should be minimal at best)

I gave it to Cait to use and she was deadly with it. I have since used other companions, I assume she still has it.