Yes, this seems to be the case:
Action > Summon Blue
Blue Dies > Prevent death > flip card to Brimstone > replace model with Brimstone
Brimstone dies > Do not prevent death > flip card back to Blue > replace model with Blue
Repeat
The Blue Horror and the Brimstone Horror are the same fighter, but with two different states. Like a skeleton he can be resurrected, but he doesn't start on the board and switches forms after dying once.
This seems to fly in the face of the "deal 4 cleave damage in one packet" meta that evolved in Shadespire, since you need to deal two separate packets of damage to finish off the Brimstone. It says he is "not driven back" so this also shuts down Trap.
Cards like Lightning Whip seem to be the perfect counter.