How does this work, exactly? I mean; the Sharingan can break optical illusions, but this one mentions damage and the 'normal' Genjutsu that deal damage have more than optical elements to them.
You do actually know that you reverse it, right? That should be the answer to the deal damage element on this jutsu. You find out that you are in a genjutsu using your sharingan, then using the sharingan you reverse the genjutsu, hence trapping your opponent in the exact same genjutsu, hence probably dealing them damage or putting them on a disadvantage in any other way. Why you don't deal more damage, even though you're using your sharingan either is quite simple too, because you only use your sharingan to reverse it, and not to create the illusion itself, because this was done by an user without the sharingan. Or, if the user had a sharingan and the jutsu cast actually was a sharingan genjutsu, then you'd automatically deal more damage on the opponent, because it is a sharingan genjutsu and not a normal one. Aside from the reversing, this works the same as any other genjutsu.
How does the 'reversion-process' function? Are we talking about two seperate actions, as in breaking the illusion, copying it if you don't know it and then perfomring the illusion? If so; do I have to perform the handseals pertaining to said illusion?
Since the technique itself is C-ranked; is the 'reversed illusion' reduced to a C-ranked one even if it's originally a B-ranked one?
Well, in my opinion the action is one fluent one. But it is not clear to me either how it exactly works. As it talks about sending the illusion back and reversing it, one could suspect you send the wave of chakra of the opponent back, but how would you have control over it? And how would that be remotely possible once it is in your chakrastream? It could be that once you discover you are trapped in the genjutsu, you focus your chakra to send the chakrawave back, de-disturbing your own chakraflow and disturbing the opponent's. Also, because it is reversing the technique, I do not think you need to perform handseals, as they are already performed, but about this I'm also not completely sure.
No, the technique itself is C-ranked as in how difficult it is and how much chakra it would cost to reverse it, but it would not lower the genjutsu you reverse in rank. To be sure of that, a bit extra chakra is added when you perform this technique whilst trapped in a B-ranked genjutsu, making the technique actually B-ranked.
Do I have to describe how I perform the technique? ;_;
Well, to anyone but senseis I'd say yes, however, since you're a sensei, I believe you can get (from my description) how the techniques work for sure. So if you really don't feel like it, no.
I hope this made it a little bit more clear. Sharingan and it's techniques aren't exactly close to being my speciality ~_~