The damage he takes during the master phase from his ability is environmental.
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Rico Loco
G4Sabbat. Black Hand: If Rico is ready during your master phase, move a Bomb from your hand or ash heap to him (no cost) or he takes 1 damage. During your unlock phase, if Rico is ready and has a Bomb, burn the Bomb and another ready minion you control takes 2 damage.
Rulings
Black Hand is not a title, it is a trait unrelated to any sect. The trait is not lost if the vampire changes sect.