A strange thing happened while I was attacking Hauntevil. I killed the Demon Queen and climbed my way to the top of the tower she was in. There were a lot of goblin merchants and their pack animals, so I was bashing away with my adamantine mace. At some point, I was getting mass announcements of goblin merchants falling over in pain. I looked at the renaming goblin merchants, and they all had yellow injury hands.
This was odd, but I ignored it and kept whacking away at merchants to stop the announcement flood. Suddenly, my screen fills up with announcements of likely EVERY GOBLIN MERCHANT bleeding to death. I'm not sure how this happened, but I've also been getting announcements of guards and dwarven children falling over in pain. I inspected the first dwarf child I came across and they had yellow hand injuries too!
I ended up leaving the site to in an attempt to find out what was the name of the settlement, but I've reentered it to see if more inhabitants are suffering from bleeding hand disease.
Excerpt of sudden goblin merchant death syndrome
EDIT: Looking around the place, but it seems a lot of members left (probably from all the chasm creature attacks and massive merchant death)
Found a child with slightly discolored hands, evidence of their previous hand trauma?
And a pump operator (taken after I bashed them once)
EDIT EDIT:
Yep, more mass merchant death. Is it something they're holding?
This Swordsdwarf seems to be immune. It has leather and iron on, and was holding bone crafts.
EDIT EDIT EDIT:
An immune child (after I hit her left wrist/hand...) Has silk on.
I also put on a dwarf bone bracelet and ring, but I'm not sustaining any injuries.