All features of the battle are explained in the walkthrough. ;) The debuff they put on you causes 30% HP damage so your defense or the amount of HP you have is meaningless against this. But the damage is caused after your action and you can use water bottles or buckets to remove it (which are gained from defeating water fairys in the challenge floor before getting to the raids), which means it is possible to take 0 damage from the debuff all fight long if you have enough water items.