I think this is the key paragraph in the Glossary:
damage wrote:When you are using a Battle Bridge side deck, any damage to your opponent's ships or facilities, whether from a hit in battle, dilemmas, or other causes, is indicated by damage markers, which are Tactic cards from your side deck. The damage results appear at the bottom of each Tactic card. See battle - ship.
And the corresponding paragraph in the Rulebook:
Damage and Repairs wrote:If your opponent is using a Battle Bridge side deck, any damage you sustain will take the form of Tactics cards. This is known as "tactics damage." Otherwise (if your opponent is not using a Battle Bridge side deck), you will follow simplified rules for damage called "rotation damage." The two systems are described below.
Incidentally, the Rulebook says you should place a Rotation Damage Marker on a ship damaged by rotation damage (you should only rotate the ship if no Rotation Damage Marker is available).
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