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.
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.
Well, some might be really amazed. They could see a new side of Deku that they never knew before. His singing might show a different level of confidence or a hidden talent, so they would probably cheer him on.
Some characters might try to understand Deku's motives. Kirishima, who was close to Bakugou, would be angry at first but might also try to find out if there were any extenuating circumstances. However, many would be afraid of Deku, seeing him as a threat now that he has killed one of their own.
One interesting plotline could be Deku having to face off against his classmates in a series of challenges that test not only their quirks but also their teamwork and strategic thinking. Maybe there's a misunderstanding that leads to the conflict.
Uraraka would be heartbroken. She was one of Deku's closest friends. She might lose some of her usual cheerfulness and become more focused on finding out who or what was responsible for his death. She could also struggle with her own self - confidence in using her quirk, as Deku was always an inspiration to her.
One common plot twist could be that Izuku discovers a new aspect of One For All during the fight. Maybe it gives him an unexpected power boost or a new ability that Muscular isn't prepared for.
Deku himself is likely to shine. Given his powerful quirk and his growth throughout the main series, he'll surely put up a great fight against his classmates. Bakugo could also shine as he's always been in competition with Deku and has a very strong quirk.
One interesting aspect could be the different interpretations of the characters' powers. In fanfiction, the author might explore new ways Deku uses his One for All ability against Overhaul's powers. It can also show different battle strategies that might not be in the original manga or anime.