This demon cause people to burst into song. They show their true emotions when they do this, which is not always a good thing, as we find out in the episode "Once More With Feeling" where Buffy admits in a forced musical that she was drug out of heaven by her friends. The real problem is that when peoples emotions run this high, it can cause them to litterally burst... into flames.

Why'd you run away?
Don't you like my style?
Why don't you come and play?
I guarantee a great big smile

I come from the imagination
And I'm here strictly by your invocation
So what do you say?
Why don't we dance awhile?

I'm the heart of swing
I'm the twist and shout
When you gotta sing,
When you gotta let it out
You call me and I come a-running
I turn the music on; I bring the fun in
Now, we're partying
That's what it's all about

https://www.youtube.com/watch?v=3qRxM-Q6P8Y&feature=youtu.be - timelapse of this skin and also what it was inspired by ;D