It’s a visual quirk, as the cloud is part of Tengu’s animation directly, rather than a particle effect.
When allies, wands, or some artifacts are used on an illuminated enemy, the debuff is consumed and the enemy is dealt bonus damage equal to the priest’s level.
The feet are indeed meant to be obscured in the grass.
Thanks for reporting this, though the best way to report buts is to email me. I’ll look into getting this fixed.