It seems utterly meaningless. If he can tank being knocked around like that without it impacting his ability to fight, then it means he is the stronger one from the beginning.
Later on, when he suddenly DOES lose a little blood from being hit against the wall (with the head no less), it's almost like an excuse, to maintain the pretense that this is a genuine fight. It doesn't work for me. (and it doesn't help that this injury does not impair him, either)
The entire fight is a brat throwing a tantrum because he wants something (strength) and immediately being rewarded - except of course that it seems he had it all along.
Maybe I am missing something because I have not watched the show.
You are entirety correct in your judgment, that is indeed how SL fights work as per God's wish. I'm not joking.