I have one of these, and my character wore it through several runs of Ghosts of Perdition. He also wore it while encountering the rare beholder in the Orchard (more than once.)
It never absorbed any spells and still has full 20 charges. My character did not have his PLIS or his Mantle on at the time. I was level drained (after having my Death Ward dismissed) just as if I didn't have the crystal equipped.
Is this just bugged? Or is it supposed to be used some other way or in some other place?