Hi, time to visit this thread again!

A faster rate of fire when overheated offers zero benefit because it just compresses the DPS into a shorter timeframe. Extending ammunition capacity is the ticket.

Extra ammunition does not help the problem of entering a fight with the wrong ammo loaded, or having to swap ammo because a situation changed. Being able to swap ammo actually lets the pilot make a choice during combat and possibly be rewarded for that choice with more damage or in some cases the ability to deal damage at all. A 40 second reload does not give you a choice, even a 20 second reload would feel punishing to use in combat.

I still maintain that frontloading rlm damage like this is a poor mechanic solely because it makes the fights binary, either frigates die remarkably quickly or they live long enough that you have to question the value of using the ship over any of its equivalents. Polarizing weapon systems for launchers (rlm only good vs frigs, hams and hmls only workable vs cruisers or larger) is unfun because it makes the pilot feel like they undocked the wrong ship when they could've taken an omen or thorax or arty rupture and had the ability to kill both cruisers and frigates decently without having to change its entire fit.

Caracal proliferation in small gang was mostly from the triple lse and lse/xlasb style fits where you had enough tank that you could stay on field almost indefinitely. Dual lse caracals were actually very balanced against other cruisers, thorax could project far enough to outdamage them in point range, omens could also hold their own (single lse omens couldn't stand up well but aar omens would have little issue provided you were in point range).

Currently reloading isn't an interesting and tactical choice, but a punishment intended to create 'tense moments of fun'.

In regards to how rapid launchers could work, to immitate the best of both options would to make it truelly an Ancilliary Missile Launcher.

Here is my idea to switch to a usefull burst weapon system.

1) Change the Rapid launcher rate of fire to the value of a normal launcher (Light missile or heavy missile)

2) Keep the reload time of missiles at 10 seconds

3) Add a second ammo type Cap boosters and while haveing cap boosters the rate of fire dramaticly increases while overloading.
While overloading a cap charge is consumed wich prevents module heat (damage as well as the heat bar) Once cap charges are gone have a really big amount of overheating.

4) If there are no cap booster charges in the launcher, chance the reload time to 40 seconds.

5) Reloading cap boosters to the launcher takes 40 seconds dureing wich ofcourse it can't be active

Now what would this mean. This would mean that the launcher itself can be tweaked in many different ways, first of all, its basic dps / burst damage will be inline with a regular launcher, simplifying that aspect of balancing the weaponsystems depending on that ammo type. Second, you can tweak with the amount of time you can overload, independantly of how many missiles the weapon has, eg you could opt to have the launcher 50 charges, but max the cap booster charges to 18, allowing to burst fire up to 18 missiles dureing that 50 charge interval.
Third the player needs to make concious choice when and how long to burst fire. Since the cap booster charges will be limited not only in the launcher, but also the total amount he has brought will decide what he can do later in the battle(s). If he burns trough all the cap boosters he brought, every reload, till he gets new cap boosters will be penalized to 40 seconds.

And yes this would mean alot of extra work adding that second ammo type to a weapon, but how i read it, the new system that needs to fix the reload / ammo swapping already requires that.