I don't know. Every time I try to come up with something, one or more details in the story contradicts it. The biggest issue for me was how little importance the alchemist (seems) to attach to the bite guard. He casually wears it on his belt as he's messing around in the dungeon, as opposed to leaving it locked in a safe or sealed in a magic circle. He doesn't react to Verona taking it and never tries to, e.g., warn her of its dangers or threaten her to get it back. And yet I can't envision him not knowing he's wearing a magical artifact on his belt, so why doesn't he seem all that bothered when Verona gets free literally by magic, snatches the bite guard, and runs? He reacts to her picking up the gunpowder, but a) an escaped prisoner with a bag of gunpowder is a problem whether or not she's wearing a daemonic bite guard, and b) it's ambiguous if he's even aware she's wearing the guard at that point. Does he care about it, or doesn't he? Thinking about it, I can't really say from the text if he even knows it's possessed, since neither he nor the daemon show any signs they've ever talked to each other.
A close second is how inexplicable of an artifact the bite guard itself is. If it's the alchemist's creation, as a weapon that can be used to eat gunpowder and spit fireballs, why on Tyria has he chosen perhaps the most convoluted way to weaponize gunpowder that I've ever heard of? And it's not for lack of inspiration: the Human army in AOF has cannons and mortars and even rockets as standard issue. If it's something he found and is trying to come up with a use for, again, it's at best extremely contrived, and if nothing else invites the same questions as to what his endgame is for this daemonically-possessed object he's found, because there's very little he could accomplish with it that he couldn't accomplish equally well with a bomb or grenade, and without submitting to a daemon's power in the process.
Why does the alchemist need blood? Maybe for alchemy? Maybe to keep the daemon contained... ergh, somehow? (But how, and why, and why didn't/isn't it working when Verona steals the guard?) What are the alchemist's plans for the bite guard? Who knows; I can't even get a read on how important he thinks it is or even whether or not he's aware of its powers.
I didn't set out to put a wall of text here, but I wanted you to understand that this isn't a lack of information problem, it's more about the details that I did have not fitting together into enough of a picture. Anything I try to resolve the issues would be wild guessing with no basis. Now that I've written this out, a lot of ambiguity could be cleared up simply by adding a line or two describing the alchemist's reactions to Verona's stealing and wearing the guard (I assume, despite the ambiguity in the actual text, that you intended him to know what it is and what it does). Shifting the first half of the story to his perspective, so we get a look at his methods and goals, and then how that backfires on him when Verona escapes, would be even better.
Edited to add; I hope this is actually helpful. My intention is to outline what it was that made things feel unclear to me so that you can take that feedback and do with it what you will; ignore it, use it to rework the story, keep in mind for later. It's still a good work of writing, honestly, and I hope that you take my (extensive) thoughts here in the spirit they're offered.