Oh, I just wrote 3 paragraphs, then deleted them because I realized I was wrong. The problem? You accidently stepped into a very confusing boogey-man of card design in Magic. A lot of people do this, though, since p/t switching and Firebreathing seem like a natural pair, but something unintuitive happens when they get combined. As opposed to get it wrong again, I'm going to quote what Phantasmal Fiends official ruling says.

"Effects that switch power and toughness are always applied last when determining a creature's power and toughness, even if other power/toughness-changing effects are created later in the turn. For example, if you activate Phantasmal Fiend's first ability, it will become 2/4. Then if you activate its second ability, it will become 4/2. Then if you activate its first ability again, it will become 3/3."

Weird, huh? For the record, I do like this take on the idea.

This seems way too powerful as repeatable creature kill. It even kills indestructible creatures.

Wow. Flowstone Overseer is top-notch in multiplayer, and this gets to do the same for half the cost?

How about just the P/T switching ability?

I don't see anything wrong with just that, except that you'd be able to machine-gun kill things with zero power.

Yeah, that seems fine. Alternatively, you could make the ability either say "target creature you control", or something more convoluted and Blood Lust-like like "target creature with toughness 2 or greater". (Probably also with similar changes to the ability for symmetry.)

How's that?

Possibly gone too far now. This is pretty unexciting now.

On a side-note, a card that switches power and toughness, but has square stats is unintuitive. May I suggest making this guy a 3/7?

Good idea