You can't adorn weapons (or armour) with gems.
You can add other decorations - bones/horn/tooth/shell and metal. Those just grab the nearest applicable item, so linking material and item stockpiles directly to the workshop is a good idea, else you'll end up with ridiculously metal X*<*pig tail left mitten*>*Xs and bone-studded bins.
I tried doing this with a "decorate with horn" to use up my supply of hooves building up at my butcher's shop.
They took a spear I had nearby and decorated it...then grabbed more bones and decorated the same spear again...and again...and again. The spear's decoration marker didn't seem to change (Granted, I had a novice bonecarver so I wasn't expecting much) but I don't understand why it applied four different decorations to the same spear rather than one decoration to 4 different items (which is what I wanted).
The description of the spear DID mention all the different bones used to decorate it, but it's value at the trade depot didn't reflect having four layers of decorations on it.
Is this a bug or working as intended?
It's working as intended - an item can get a separate decoration in every single 'material' you have on hand. In the case of bone/horn etc. this means a spear can e.g. get decorations in goat bone, goat horn and goat hoof, as well as cow horn, pig hoof and groundhog bone. Each of those is a single material. Dwarfs take the closest available item to decorate, and items already in the workshop are the closest of them all (they're also acceptable when stockpiles are linked to 'give' to the workshop).
If you want many different items decorated, the best approach is to take a valuable metal and order studding with it. Since you can't put two decorations in gold on a single item, a "stud with gold/R" order will go through decoratable items pretty quickly.
Bone decorations are typically quite low-value, bones and horns of ordinary domestic animals have a value multiplier of x1, so a no-quality bone image is worth a whole 10 ☼, a masterwork one 120. EDIT: and in case there are any misunderstandings, decoration value is only _added_ to the value of the item itself; say an exceptional steel spear is rated at 2700☼, adding three types of well-crafted and one of standard bone decorations will increase the value to an incredible 2770☼. Bone decorations are convenient to get rid of excess bone, little else.
(Bones themselves have a value of zero because that's the base value of the bone 'item', a decoration has an item value of ten.)