If I’m reading this correctly, the total increase of Max HP seems to go +60 (1×60), +100 (2×50), +120 (3×40), +120 (4×30), +100 (5×20). If you mean to cap the increase to 120 HP, there are simpler ways to do it (say, by limiting the number of Bulk Monstrosities to two per Monster).

This solution seems a tad convoluted

I thought of diminishing returns as an elegant way to put it. It forms a negative parabola. And that’s right, it’s +20 for the third Bulk. Well calculated!

Diminishing returns is one thing (e.g. +60, +40, +20, +10, +5), but what we have here (+60, +40, +20, 0, −10) is something quite different: the fourth Bulk Monstrosity offers no returns at all, and the currently impossible fifth actually offers negative returns.

Since no rational player would fill all their Monstrosity slots with Bulk, knowing that anything more than three would be a waste, it is futile – and thus inelegant – for the rules to allow it. I’ll give this proposal a chance for the sake of its practical effects, but I’ll seek to reword “Bulk” at the earliest opportunity.