I've flipped around and not been able to find a definitive answer on this one. If Kismet has put her talisman on a hero and that hero gets incapacitated, what happens to the amulet? We checked everything and nothing I could see said that it should go back to Kismet. It's treated like a character card (that we did find in the errata), but do we really get X free turns while Kismet pounds away at an amulet that's on a downed character? That doesn't seem at all fair, but considering that we have 7 jinxes on the table, nobody was complaining about the respite...
Kismet also damages the talisman so eventually she would get it back. She aslo damages the hero with the highest HP not the one holding it. So no turns free of damage.
You're right, she does hit the hero with the highest HP... sorry, forgot that part. We had Nightmist in her invulnerable state mitigating that. But we did have X turns before she flipped to the "Hit everyone for 1hp, increased by X where X is the number of jinxes in play".