This is actually insanely powerful even on its own. At the cost of never playing 7 cards until you win you can stack 7 dmg reduction with relative ease, which can be good enough to replace dims in otks that dont mind the drawback all that much. As you noted it works well with nightmare making it a great asset to all kinds of darkdoms, it also works well in a stall with vagger and siphon life providing inelement healing as well which help you recover from the early dmg intake. N grows pretty quickly (unless the shield already does its job), so even though many marked cards will be played right after the marking, you should reach a sizeable dmg reduction fairly quickly (I think after 10 hits you can reasonably assume at least 4 DR which is better than diamonds). Dynamic updating makes the card even stronger than it already is, especially with no way to play cards between the creatures attacks.
Also i want marked cards to be marked (it's in the name!) so that players can see what cards are affected, a glow or a symbol like for momentum, adrenaline etc. will do.