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While it may be a touch attack, the special rules on this weapon have an unfortunate caveat:
"This weapon damages all targets with an AC equal to or lower than the attack roll."
So while it might touch everyone in the line, it doesn't hurt them unless it goes over their regular AC.
The RAI is rather obvious, but a tiny spare word in the errata would make it work better.
I'ld rule that all effects are based on touch AC, but that's my houserule.