salted with fire: The fire of testing has a purifying effect, like salt (see also 1 Peter 1:7; 4:12; Revelation 3:18). Salt also refers to Christian character. Genuine Christian character will have a genuinely purifying influence.
but if the salt loses its saltiness: Salt from the Dead Sea often contained gypsum, a soft mineral. Because of this, it could look like good salt but still be useless. It did not taste salty, and people could not easily throw it away because it was not good for soil or other uses.