I try to have a certain group of mobs not get increased HP but still have increased damage based on difficulty (since they have their integrated hp leveling system and adding the scaling health one to that makes them stack infinitely hp).

Sadly the blacklist that blocks extra Health also blocks receiving extra Damage and this results in them getting no hp and no dmg. There is a blacklist to block damage gain but keep HP gain so there also should be one to do exactly the opposite. Block hp gain and keep Damage gain.