Karmic Retribution's text indicates that the ability is intended to proc against enemies which deal physical damage to the target, but while experimenting with teams and abilities today I found that Karmic Retribution's counter effect procs from the self-applied damage from Exertion, damaging and potentially disarming yourself. I'm not sure if this is a bug, intended, or just overlooked, so I'm not posting this in the bug-report thread but it is an interesting interaction.