Corrupted Body does 2x Ryen's ATK as damage to himself (+/- 20% variance, and ignoring any armor). It's not based on M.HP and therefore not changed by reducing your M.HP, but increases when your ATK goes up.
That your HP goes back to 1 is news to me. Might be a "feature" of the RPG Maker engine, that you can't kill yourself with your own skills, or that the buff is applied after the damage and somehow causes the char to be alive again. But there is no revive or healing effect added to that skill to intentionally keep him alive.
When you finish the fire raid often enough, you can do it solo. After winning a solo fire raid, you can find a chest in the area with the dusty crafting book. This book will allow you to use the raid anvils for combining, upgrading and disassembling equipment.