I encountered the same thing on two different accounts. This happened to Commander Luke's team in both games: even if you deal incredible damage, the enemy doesn't die.
Ideas
The damage over time is more than 1660, I guess you didn't look at the picture. Neither zeta not debuff can explain this
It does. Every debuff you are inflicting is allowing Dengar to recover 3% Health and Protection. That's including every Expose from C3P0's unique and all those DoTs from your data disk setup. You'll also be performing a ton of crits which will also heal him.
Regarding your 1660 DoTs, those are never going to trigger as they pop at the beginning of a units turn and Dengar isn't going to take a turn due to all the turn meter removal on your CLS squad.
All these interactions are working as designed.