Deku might be completely shocked at first. Since Bakugou has always been so aggressive towards him, he would never expect such a confession. He might just stand there, mouth agape, not knowing what to say.
He might cry a lot. Deku is very emotional, and being cheated on would be a very painful experience for him. He could also get angry, which is rare for him, but this situation would be so unjust that he might not be able to hold it in. He'd probably start to question his self - worth too, thinking that there was something wrong with him that made his partner cheat.
One possible plot could be that Villain Deku is on a mission to undermine the hero society and crosses paths with Hero Deku. They engage in a fierce battle where Villain Deku taunts Hero Deku about his ideals. In the end, Hero Deku manages to get through to a small part of Villain Deku's conscience, leaving him with some doubts about his villainous path.
Deku might be initially shocked. He's used to Bakugou's aggression, but an actual injury is different. He could be in pain and disbelief at first. Then, he might try to downplay it, especially if he doesn't want to cause trouble for Bakugou, because Deku is generally a very forgiving character.
Bakugo would be deeply affected. He might initially deny his feelings, but then would be filled with guilt for all the times he was mean to Deku. He could become more withdrawn and focused on becoming a hero worthy of Deku's sacrifice.
Villain Deku might start to question his villainous ways. Meeting Hero Deku could make him see the good in heroism. Hero Deku, on the other hand, could become more empathetic towards those who turn to villainy. He might realize that there are reasons behind it and not all villains are just 'evil' for the sake of it.
In fanfiction, a quirkless Deku often has to rely more on his wits. Canon Deku got One For All, but in fanfic, he has to find other ways to be strong. For example, he might study different fighting styles more intensively.
Toga could be an ally. Since she has her own complex relationship with the idea of heroes and villains, she might find Deku's transformation interesting. She could provide some of her unique skills, like shape - shifting, to help Deku in his villainous plans. Additionally, Twice might also join them because of his loyalty to Toga and his own sense of being an outcast in the hero world.
A possible plot is that Villain Deku has a plan to destroy a major hero institution, and Hero Deku has to stop him. But when they meet, Hero Deku realizes that Villain Deku was once like him, full of hope. This makes Hero Deku hesitant to fight at full force. Or perhaps Villain Deku has kidnapped someone close to Hero Deku, and during the rescue mission, Hero Deku tries to convince Villain Deku to change his ways. Also, they could be from alternate universes where the roles are reversed, and they are forced to interact and learn from each other.
For Hero Deku, his development could be shown by how he reacts to seeing his dark self. He might start to question his own beliefs and actions. For Villain Deku, his development could be in the form of a possible redemption arc. Maybe he starts to see the error of his ways through his interactions with Hero Deku. For example, if Hero Deku shows him kindness or understanding that he never received before.