I am not sure of the answer that is being sought here.
I think this almost completely transforms a creature.
I think this would a good addition to death's arsenal of necromancy spells/skills.
I think it adds creature generation to death and gives
them greater control over their field.
I would most likely only use this on my own creatures.
I think this would work very well in time\necromancy deck.
I think a good strategy with this is:
use a free/or cheap creature Example: Photon it would become a 2|2 Zombie; player wants a more powerful creature, so rewind it, but first transform a second creature. if player doesn't get what they wanted re-transform creature and try again.
Edit: Rutarete and I have been discussing this and he said answer this:
What can this do that Lobotomy can't? And how is that better?
My answer: This makes the creature an undead, adds a small buff, there's no lobotomy like spell currently in death element.
This makes the undead passive more versatile; and the more ways there are to utilize this in ETG the better.
That is all I can think of ATM.