The curse fog seems to be triggered by the tall deacons in the second phase. Sometimes, one of them will stop moving and just start shooting soul dregs up into the air. If enough of them (3 or 4, it seems) are doing this, it triggers the curse fog. However, if they're staggered (or backstabbed) they will resume their normal "aggressive" tactics, though they may later resume firing soul dregs up if left alone. Notably, if many of the plump or generic deacons start shooting soul dregs up into the air, it does NOT contribute to the curse fog, but instead means that Royce is charging up his deep soul attack. You should quickly stagger him to cancel this attack (should only take one hit, since he has no poise at all).