No. I'm not missing anything.
Bad Stuff is what happens when you Run Away and fail the escape roll. Bad Stuff penalties range from losing items or levels up to Death. In the case of the Hippogriff, that penalty is item loss in the manner detailed on the card. The first part is just flavor text. If you must have a more detailed in-game explaination than that, think of it this way...
If you aren't killed immediately, you eventually escape. You just suffer some Bad Stuff in the process. Personally, I try not to worry about the logic of it too much, and think that is what gets some people hung up on things.
If something is going to happen to you when Running Away even if you escape, its going to say so specifically. Mr. Bones is an example of this.
His regular text clearly states a penalty for having to flee. His Bad Stuff explicates the penalty for Running Away and failing to escape. It's as simple as that. And it is fairly clearly stated in the rules. (At least I always thought so).
I will admit that I tend to think that the mixture of flavor text and rules text can be confusing, and a canonical list of Killer Monsters would be a useful addition to the FAQ, if for no other reason than to minimize these discussions. Although I just noticed, and maybe this could be pointed out in the FAQ, if the monster kills you, it does nothing else to you in the Bad Stuff. And if it does something else to you, it doesn't kill you. And this holds true for the three sets I have(anyone wanna see if its true in Fu?). So one might say the true rule of thumb for Bad Stuff is that if it details the loss of Items, Levels, or other such restrictions on your play, you are not dead. If your dead, nothing else happens to you(not counting
the Looting, being as that is a consequence of being Dead not Bad Stuff directly). And it even covers the slightly confusing case of the Plutonium Dragon.
