I have read the initial playtest, and I just feel this ability is a bit broken. I am playing an evil Brawler/Strangler Archetype in a campaign currently, and this is just the ability I would want for a 2 level dip. The problems I see are as follows:
1. No limit to how many times I can do this in a round, so I can essentially use this for all incoming attacks, which I assume include melee, ranged, traps that target AC, and spells that target AC.
2. No specifications for what happens when the grappled creature dies. Essentially, what is to stop one from using a corpse as a shield forever? I assume a corpse has a CMD of 0, so this will always succeed.
3. What is to stop someone from using a dummy wearing armor as a living shield, as they would also have 0 CMD?
What this leads me to think is you could dress a dummy or corpse in full plate (or some tied up chump if you are evil, just to fulfill the "living" part of the talent), carry it around with you, and never get hit by a melee attack ever again. At level 2. Seems a bit broken.