Fire resistance makes you totally immune to fire, lava, magma, and blaze fireballs. Basically half of what the nether can throw at you. I don't think this makes for good game design, so here's my solution:
Immunity to fire acts like drowning, with a little fire bar on your HUD that decreases when you're on fire or on magma, and deceases doubly when you're in lava. Additional levels of fire resistance will make your fire immunity bar last longer. All status effects can have levels, but sometimes they don't make any difference, well that's about the change for fire resistance!
When the fire bar is depleted, then you will start burning. This makes having Fire Protection armor have value even when you're stacked with fire resistance, instead of being completely negated by it.
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