This is actually false. What is happening is that when the damage reduction happens, it is possible for some to bleed through the shield. When I say some, I am talking less than 1.
The problem is that the client inspects the damage and sees that it did any damage to health at all so it thinks the entire 25dmg or whatever was applied to the health so it decides to not display any of the shield effects.
Again, in reality, most if the damage went to the shield with only fractions of a health point deducted from health.
Still a bad bug since it confuses people but it's not really as bad as this post makes it out to be