This is before his quirk upgrade and one for all getting captured but after Dabi and the others are in the league. In fact he was watching shigaraki train.
Also I know his quirk doesn't decay him but this is a quirk malfunction.
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Shigaraki's eyes widened as he felt seering pain. He looked down to see his hands crumbling way, he screamed out in pain, falling backwards and pressed against a wall. All he could do was scream in pain, tears falling down his cheeks. He knew the heros would find them from that but it just hurt so bad...