The more the hits in a combo the less the damage they do, specially those ones that come last.
Check Viola's crazy combos or Leixia's, or anyone else's. If the moves in the combos did their normal damage, then I guess the matches would end really fast. Specially a Viola-Elysium would end the match in no time with one combo, just by taking advantage a single mistake...
So yeah I guess the damage reduced depends on the moves' properties, the combo length and the position your opponent has. Also it depends on their health as the moves' damage is reduced once the lifebar turns into yellow.