Rage is an informal term used to describe the passive power-up gained by fighters with very high damage built up. When a fighter with a dangerous damage total (edging into red) starts smoking (especially noteworthy on their portrait), their attacks dish out extra damage and knockback! This gives fighters at extreme risk of knockout a bit of a comeback mechanic. High rage makes a wounded fighter that much deadlier, and should give their pursuers a pause, since being overzealous chasing a knockout can easily backfire. In the Rule Settings, Rage is known as Underdog Boost and can be toggled On or Off (the default).
Learning how to play around your opponent’s rage, as well as using your own when you’re beat up, is crucial. Some players may flirt with hovering in high damage on purpose, counting on brinkmanship as a winning strategy. With good avoidance, directional influence if you get launched, and well-aimed high-damage hits on foes chasing you, exploiting rage on purpose can get surprising mileage.