Last night we ran into the following scenario…

Character spends their first action to explore. The app places the tile and says something bursts into fire (place a fire token). Then says you may move 1 space into the room.

At this point if the investigator take the option to do so would they immediately take the 1 facedown damage? Per the rules yes, but the character, once in the room, used their second action to extinguish the fire. What caused confusion was this line in the rulebook

Quote

Fire discarded by this effect does not cause the investigator to suffer damage.

The investigator takes damage when he moves into a burning space, even if he extinguishes the fire afterwards.

The rule you quoted keeps you from taking fire damage a second time when you take your action while in a space with fire, if this action is used to extinguish the fire.

In order not to take damage he would have had to decline to move into the remove, use the extinguish action first, then step into the room which would remove the fire without him taking damage. Note that extinguish lasts the entire round for every tile you move through (dependent on number of successes) . As he likely would have spent an action to open a door, he would have to wait till the next round to be able to move into the room safely.

Alternatively if he had an action left, step into the room, and spend the second action to extinguish, taking only one point of damage. But this wouldn't be wise, neither would waiting outside the door, as the fire would likely spread to his space at the end of the round.