False Damage is the nefarious weapon of Glamour magic. It remains on the subject as long as even a single Glamour Mage opposes them, and it can put the fellow over the edge.

If the sum of a person's False Damage and HP Damage is higher than their max HP, their mind/soul assumes they are dead and bails out. This is not real damage, but the mind and/or the soul assumes otherwise. False Damage does not cause Afflictions, and it doesn't really persist after the enemy Glamour mages are gone, but it also can't be healed in the same manner as HP Damage. It also doesn't draw real blood, so it isn't considered real damage for the purpose of various Blood effects; Blood Bond, Blood Vengeance, and even Damage Reversal will not work.

Once the Glamour mages are dead or gone, the mind/soul takes time to readjust, but it burns off 2 False Damage each round. Mages with 3 or higher burn off another 1 False Damage each round, even when enemy Glamour mages are present.

Does it Affect the Mindless?

Yes.

The short answer? Game balance.

The long answer? Well, it's not as though the Mindless are utterly unaware of their surroundings. They have to aim their strikes, after all. Thus, False Damage could fool or overwhelm whatever simple systems or spells let the Mindless do things; not within the nonexistent mind, as a Mind Burn or Paralyze spell of an Astral mage would, but just beyond their form.