In this case, that damage reduces your life total as normal
At events like prereleases, where newer players face experienced ones, I see new players get surprised by all the different opportunities to interact during combat
I hate aimless Chaos decks that cast Scrambleverse, turning a 1hr game into a convoluted 4hr game "because it's funny" -- it's not funny, Jim, and you play that deck again I'm gonna spill my Cola all over it -- but Chaos-themed decks that actually try to win and are focusing on "random" effects like Temporal Aperture and Jeleva, Nephalia's Scourge are totally cool in my book
Nekusar, the Mindrazer Nekusar, the Mindrazers one of those early-day commanders that still sees plenty of play
Rat Colony is a great example, with its Dominaria printing being $2.50 (likely the value Wizards used to calculate what cards to put in the drop) and the Secret Lair version pushing $8
Make sure you don't get hit in the cheaphole and may the mythics, the guilds, the prices, and the cards be ever in your favor, my friends!