The Liquid Flame will constantly change form. The human form will mostly focus on offense, the hand form will focus on defense, while the tornado form will focus on healing itself with Fira.
When damaged, the human form will counter with Blaze, the hand form will counter with Fira, and the tornado form will counter with Magnet. It will then change form. The hand form is immune to Ice but the other are weak to it.
The form in the Phoenix Tower can be slain later by the party's Necromancer to obtain the Dark Art Meltdown.
Having high level Ice magic will help: Black Mages casting Blizzara and the Mystic Knight should charge up Blizzara Sword. If the player has it, Shiva will also prove useful. The player can break some Ice Rods as they should deal a lot of damage. When Liquid Flame switches to tornado form, the player should fully heal the party since it will not attack, and wait for it to exhaust its MP.