We observe the dissipative dynamics of a dense, strongly interacting gas of bosonic atom pairs in an optical lattice, controlling the strength of the two-body interactions over a wide parameter regime. We study how three-body losses contribute to the lattice dynamics, addressing a number of open questions related to the effects of strong dissipation in a many-body system, including the relationship to the continuous quantum Zeno effect. We observe rapid break-up of bound pairs for weak interactions, and for stronger interactions we see doublon decay rates that are asymmetric when changing from attractive and repulsive interactions, and which strongly depend on the interactions and on-site loss rates. By comparing our experimental data with a theoretical analysis of few-body dynamics, we show that these features originate from a non-trivial combination of dissipative dynamics described by a lattice model beyond a standard Bose-Hubbard Hamiltonian, and the modification of three-atom dynamics on a single site, which is generated alongside strong three-body loss. Our results open new possibilities for investigating bosonic atoms with strong three-body loss features, and allow for the better understanding of the parameter regimes that are required to realize strong effective three-body interactions.