If this is an inappropriate circumstance (the ship is not totally outclassed but is instead gimping itself) then that sounds like a behavior bug to me and could probably use its own thread in the bugs section.
Yeah, it's probably an AI miscalculation (not bug, really, just not quite taking advantage of it well) in part; the intended use case is to use it when Hard Flux < 50% of Overload values or thereabout, after that it gets reeeeeal situational, even in Vanilla, so it probably shouldn't bother past that.
Losing the DPS trade, even at a weak Soft Flux level where a lot of weapons are forced off, creates more problems than it solves, once a capship with this is surrounded and
must start killing the sources of DPS. It's probably far better to simply drop the shields and start taking armor hits.
I tried a further variation of this:
Fortress Shield,fortressshield,,,-0.05,,,,,,1,15,1,35,,,,TRUE,TRUE,,TRUE,TRUE,,graphics/icons/hullsys/fortress_shield.png
This allows for Hard Flux to actually be bled off while your ship's forced to quit maneuvering or firing, giving the ship a real second chance but at the big cost of being out of the DPS competition for quite some time and not being able to pull it off again in time to avoid Overload, in really serious situations. It may not save a ship from a pack of wolves, but it means that it'll emerge and be really dangerous again.
I think something like that's how I want to keep it over here; this gives it more of a turtle use and it's less likely to be used badly by the AI.