I think SH's method of removing the True Source from channelers is rather basic. We've seen him make a globe and this seems to suddenly make the Source vanish. When Rand hurls the OP at Ishamael, he cloaks himself in the True Power and it's described as water into dry sand. Later Ishamael weaves a similar orb using the True Power, and Rand says that it absorbs even the light of Callandor.

I'm assuming SH is vastly more powerful, being a direct vassal of Shai'tan. His globe is an enormous source of the True Power and in effect is so strong that it blocks out the OP totally in a given area, much like a Far Madding effect.

For this reason, it's likely SH cannot interact with the Domination Band without destroying it. I assume that ter'angreal crumble in his hands, or they harm him in a similar way that the medallion harms the gholam.