Should I keep this orchid? Is it fungal infection?

I’d keep it.

The leaf tip dieback and the black spotting is not normal for Masdevallia coccinea. They could’ve resulted from heat stress or significant root damage. Other possibilities of what the black tinge is are fungus or dirt.

You could use rubbing alcohol to wipe the leaves down and see if the black stuff comes off. After alcohol has evaporated, if you still don’t feel comfortable, you could try using a fungicide.

If the black stuff does not wipe off, then another possibility is leaf pitting from edema. Should it be edema, then you may have to be careful to not provide the plant with too much water.

If you think it might be virused, then perhaps a test might be in order.

Do you have photos of the entire plant, including roots?

Masdevallia coccinea does not tolerate heat well for long periods of time. The warmest they should be grown is about 80 F, (this is in my opinion, the safest upper limit temperature). If it does encounter 80 F temperatures, the evening temperatures should be 10 F - 20 F cooler. Temperatures of 85 F are only tolerated for about a couple of days in a week. Most of the week should be cooler.

The low end temperature of tolerance is about 36 F.

You can easily search the web for the yearly temperature averages from where these orchids originate. This should verify that the temperature ranges I provided are pretty safe for this species.

This is an orchid that is often found growing low to the ground. It has been seen growing on moist rock surfaces or near the roots of trees in the wild.

They can tolerate a good amount of light. Moderately bright indirect light is what I’d recommend.

Grow evenly moist. They don’t like it sopping wet.