How can I pull in device status into a rule. Using %device%?

So I have a trigger rule of HSM. How can I pull the HSM status in a rule?

You can't with a variable (%device% is a string value representing the display name of the triggering device). What you can do is use conditionals in the rule actions to check the current state of specific devices (including ones you did--or did not--trigger with), then act accordingly. If you have a specific use case or rule to share, you may be able to get more specific advice, otherwise that's the general idea.