I don’t think what I will describe is a bug but I am not sure it was planned to work as it works now since 1.0.12.
The Mutant Swampdweller Subversion ability allows it to afflict all enemies with Blight. The Diabolic Watchman increases allies HP to up to 60% at the beginning of the fight.
So when you have a Diabolic team and fight a Swampdweller, all Diabolic allies lose up to 60% HP at the beginning of the fight instead of gaining it because of the Blight inflicted by the Swampdweller.
That makes Diabolic teams almost useless when you face a Swampdweller.
Was it planned to work like that ?