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There are no negative effects as far as story and approval rating with NPC's goes. Nobody seems to really know you are one of those "horrible" Blood Mages, even if you activate the mode right infront of them (lol). The only "negative" thing about it is that it uses HP instead of MP (only when activating the mode), and any healing effects on your character when the mode is active are reduced by 90%, so you have to be reallly careful not to die in combat and stand far back.