The "healing" bug has been mentioned a load of times on the forum (not recently though) and the devs haven't done anything about it.

I think it is triggered when a character does damage based on enemies max hp and missing hp and Odin gets down to low health. I think there is an overflow error in one of the damage calcs which means you do negative damage and he heals. It's not only Baph that causes it, there are other characters as well.

Sometimes (if you are careful) you can work out what attacks to avoid and reverse the effect so you can gradually get his health back down again. Other times, you just have to accept it and take the loss.

If the battle has taken a long time, you will probably end up with no rewards even if you do manage to finish it