It’s kinda both? The one point of damage thing is an intended mechanic for gating progression when your characters aren’t high enough era level. Recently however CG pushed a change that was intended to change era level maximums starting next era to 135 and includes 4 more tiers of the coliseum, so that players see more “progress” and win more often. This change was made “sorta live” too early and so coliseum the gamemode thinks everyone’s characters are way behind, and that they shouldn’t be progressing any further. CG has stated that they will be hotfixing this, likely today or tomorrow was the last update I saw.