I've made an updated version that is compatible with damaged attributes, see here
Happy to delete if acuru updates this one

Is there any progress on the path with Damage Attributes Instead?

There is mod called "Damage Attributes Instead", that gives you damaged version of attributes instead of destroying them. I am intended to make compatibility patch for it, but need to figure out some more stuff first. Just got into modding this game.

I think making it so that it damages ability instead is nice. I wish one of those mods made it so that the damaged ability produced by the fascination buildup worked like a notoriety or created a notoriety. This way, the incentive is not to heal for the sake of healing but to avoid your madness being found out. and with dread, it could lead to a wound (caused by reckless behaviour flavor-wise). I like the idea that reason's absence causes suspicion and passion's absence causes harm.