Using it makes you hostile to both Alliance and Horde no matter which faction you're on... so flagging you for PvP except both sides can attack you. You can only attack others with PvP on or others using the Censer. You get a bloody coin each time you kill someone, and those are spent on rewards like the Mushan mount etc. It says all of this on the item itself and the front page.
EDIT: Oh and if you're killed then the buff wears off.
The real question is, are people just going to form gank squads and farm all day, or will you be red to ALL people including group mates? The latter would be ideal.
Originally Posted by Statue of Liberty
Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door!