So I bought treaty of champions and played act 1 and it says to place "treaty of champions" advanced quest card into play for act 2. The overlords reward on card states to exhaust with monster that has HOT trait! Well the HOT trait is not an open monster group for any of the acts, so I'm confused how this card would even be used!???

There are quests in certain campaigns that do allow "hot" open monster groups. It's the flame symbol.