Basically what happens is this. I cast EP on a mob A. When mob A dies it does damage to mob B based on its HP aye?
However if that damage kills mob B instead of merely damaging it, I multiply that kill damage to values as high as 2-3b on mob B.
M4D works this way, whatever damage that mob takes is dealt as an AOE in 20 yards. So therefore if the DH marks mob B, the effect will proc and you'll see a 20 yard wipe (very noticeable in large packs of trash)
I'm just going to add this because I was as confused as F and had to look it all up.
Sever's ability "Enemies rest in pieces" means that when the game sees that you are doing enough damage to kill an enemy, it replaces your last attack with a massive crit. The way this works with the party is that it doesn't matter who kills the first enemy, because the second enemy will be killed by the monk's EP. Since the monk is the source of the damage and the second enemy is going to die, Sever replaces the EP damage with a massive crit. If that enemy has Marked for Death: Grim Reaper on it, not only is the damage increased by 12% but it hits all of the mobs around it as well.