Great question! I put together everything we have seen of Deuce's unique magic on the NA server and it seems that it might only store and repay magical damage, not physical damage.

The very first times he uses it, one of the members of the gang that attacks him and Epel is actually a former student mage who dropped out of magic school. The fight starts out with sound effects like "slam" and "crack" which might insinuate a physical beating, but when Deuce refuses to fight back the gang member starts to mock him and we get flashes of light with "fwish" and "zoom" sound effects, along with the sparkles that Twst generally uses to denote magic use in-game.

That is when Deuce's unique magic kicks in for the first time: after he has taken magical hits and he gets truly desperate (because Epel has been attacked).

The second time Deuce's unique magic comes up he is able to explain it himself: Vil asks how he can have so much magic in reserve (using the word 魔力 in Japanese, for "magical power") and Deuce answers that it isn't his magic at all: it's Vil's power (also using the word 魔力) that Vil hammered into him.

Later Deuce explains that his counter attack against Vil was only as powerful as it was because Vil had hit him with such potent magic to start with, very heavily insinuating that he only retains magical damage, so this unique magic probably can't be used in something like a fist fight.

(The whole reason the gang member from the beach just happened to be a mage school dropout was potentially to establish this fact.)

As for whether or not he heals magically after using his unique magic, that doesn't seem to be insinuated anywhere in-game.

On NA Deuce comments that he feels "relaxed" after the fight with Vil, but this is not in his original dialogue. His original line is closer to "I'm so nervous that I've actually calmed down," with no reference made to whether or not he's recovered any more than anyone else.

Deuce being able to magically heal himself afterwards seems like it would be a big enough effect for someone to comment on, but no one ever does, so we cannot be sure. All we get is Vil that saying that no one had been able to give 100% after exhausting their magical reserves.

(Deuce's unique magic has come up a third time on JP server where it follows the same pattern of 1) hoarding magical attacks and 2) no apparent healing effects after the fact, though someone probably would have mentioned it at the time.)