My turn, Demonic Pact activates, deals damage to opponent, but opponent keeps the one card in hand. Next turn, this repeats and opponent keeps both cards in hand.
Madness cards cannot be forced into discard by any means. This is working properly.
It isn’t a discard. Demonic Pact specifically states “destroyed”, similar to many other cards with “remove card from hand” type affects that do not count as a discard, such as Sphinx’s Tutelage.
I’m willing to bet it’s a wording change that never happened with the introduction of SoI.
Anyway, “destroyed” in regards to a card in hand doesn’t quite fit with MtG grammar. It should’ve been “discard” to begin with. “Destroy” is used for permanents on the board.
MtG grammar has been thrown out the window for this game, which certainly has confused me multiple times already. Vigilance comes to mind here.
Destroyed for a card in hand is what you do when you optionally discard, which also doesn’t trigger madness effects. And again, see Sphinx’s Tutelage.