It’s not physical, and it doesn’t attack whole team. It places a ‘mark’ on one soldier every turn. That soldier and any friendly within 5 tiles will suffer 40 damage per ‘mark’ (sometimes there is a dropoff ant it falls to 20). So if you have 3 soldiers with the mark within 5 tiles of each other they will suffer up to 120 damage per turn. If the YE can’t place the MoV on a different soldier (for example, because only a few soldiers cross the gate), it will place it on the same guy and the marks will stack. So if the same guy has 3 marks, he will receive 120 damage each turn.
Defeating the YE is easy (last time I finished it on Legend without using a single medkit) provided you move on it fast, keep the 5 tile distance and when you get there have the firepower to deal a lot of damage. You want to go for the eyes (because they cause massive loss of HPs), and the point of the tentacles is to protect the eyes.