Curse, which is intended to reduce the target's defense to 0, only affects the tooltip for the defense entry on the character sheet. It doesn't have any effect on the target's defense for the purpose of actual damage calculations against that creature, and it also doesn't have any effect on the number shown on the character sheet (outside the tooltip) or in the bottom-right window that shows when you hover over the creature on the tactical screen.

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Full Details:

I've noticed Curse seeming pretty ineffectual in a couple battles, like one time where my 40+ defense knight was still shrugging off attacks despite being cursed, but a recent encounter made me pay attention enough to verify that it was broken.

As Oracle Ceresa leading an army of 15 Cyndnum Demons (3 groups of 5), I attacked a Slag. Those odds favor the Slag, and the key to my battle plan was slapping a curse on it (to neutralize its 21 defense) and surrounding it so that it doesn't destroy my units all at once (with its huge damage AOE attacks). Well, the curse hit, but it didn't actually... do anything. My Cyndnum Demons were still showing 1-2 (x5) damage on a hit, and the Slag still showed 21 defense.

The particles were there, and when I pulled its sheet up, it did say it was afflicted by curse, but the only place I could see any impact on its defense was when I hovered over its 21 defense entry. The hover text was the only part that seemed to be working right -- it showed 0 defense (+21 base, -21 curse).

I had no other option but to fight on and hope for the best, but it was a slaughter: the Cyndnum Demons, which normally maul unarmored enemies for 25-45 damage per hit, were love tapping 4-6 damage hits on the Slag. And that was at first, when they had a full five figure unit. The beast made short work of my army and I was soon licking my wounds back at the capital.