Does Swallow your fear get rid of the shaken condition? I don't think it does but the spell seems slightly under powered if it doesn't.
It does not remove any effect. It alters Frightened and Panicked, but not Shaken. You receive the listed bonuses when Shaken, though.
That's what I thought but giving up 2 ac for 1 damage and halving some of the penalties just doesn't seem quite worth it.
It isn't worth it. Quite a few spells and other abilities just aren't very good.