So over on discord the question of how Painful Magic actually works came up. For clarity, the text of the flaw is:
Casting spells causes you to suffer the equivalent of one Fatigue level in pain for each spell you cast. This reduces all your actions by the appropriate Fatigue penalty, which is cumulative with any from actual fatigue or injuries (though you do nots suffer any physical damage from pain). You recover these “pain levels” just like Fatigue levels.
My reading of the flaw is that because "the appropriate Fatigue penalty" from pain is stated to be cumulative with the penalties from "actual fatigue or injuries", this means that a character could simultaneously be Tired (-3), suffering pain levels equivalent to Dazed (-5), and have a Light Wound (-1) while still remaining conscious, resulting in a total penalty of -9.
The other reading I've seen is that "pain levels" are cumulative with real fatigue in the sense of simply being counted as if they were fatigue levels when determining penalties. It's certainly a simpler way of handling things, but I'm not sure it's correct.
As written, both readings are possible, and I don't know of anything in the published books which clarify how the Flaw works.
Personally I think the "pain levels" are supposed to be counted on a separate track from actual fatigue levels, but it is far from obvious that this is how it is intended.
As the person on Discord who helped spawn this question I have to say I always read it as a single track that accounts for both pain and fatigue. That said I see how it could be read the other way.
I disagree. Note that it never says that the "pain levels" are cumulative with fatigue levels. It says their penalties are cumulative (just like they are cumulative with the penalties from wounds). Also, I disagree that:
It's way more complicated than the natural interpretation. Suppose you cast a spell, and incur a fatigue level, and a pain level. According to this interpretation, you would now be at the equivalent of "Weary" (-1). Do you recover pain and fatigue in parallel? If so, which did you accrue first (which obviously recovers way faster)? This interpretation is simpler only if it really means:
Casting spells is painful for you. For each spell you cast you lose one extra fatigue level, representing the pain. This is treated exactly like normal fatigue for all purposes.
I'll add another to the two track discussion. Otherwise the description could be much shorter.
"Casting spells causes you to suffer the equivalent of one Fatigue level in pain for each spell you cast. Record the pain as 1 level of fatigue."
Explanation completed. No ambiguity, if that was what was intended. The extra complexity suggests a pain track and a fatigue track are required.