This card intent seems to be to help combat-heavy decks struggling against location lock, but in the end I feel that due to its unreliability it will not see much use. You could potentially even end up putting an enemy back in play without discarding any location if you are unlucky, and that degree of lack of control pushes this card into "full folder" territory for me.
Response: After you attack and destroy an enemy, shuffle the encounter discard pile into the encounter deck and discard cards from the top until an enemy is discarded. Add that enemy to the staging area to discard a non-unique location with equal to or less that that enemy's .
The Land of Sorrow #114. Tactics.