I have noticed that I will be fighting a monster and it's health bar will shrink in size. What is causing that? I don't mean the red is reducing. I mean the actual size of the bar has shrunk implying to me that the monster overall health has shrunk.
as posted before, it is the minor mangle status effect. it is applied from dealing bleed damage which inflicts the hemorrhaging status to its target (or a skill that specifically directly applies that status) and this reduces the enemies max health which the smaller health bar becomes smaller to show this.
It works like the players health bars where if you use a food or drink that increases max health, your health bar will get slightly bigger, this does the same thing but reduces the size of the bar when the max health is reduced.
Status effect from bleed damage.
Hemorrhaging: Target bleeds over 4 seconds, and applies Minor Mangle for the duration, reducing their Max Health by 10%.