Does reflect prevent damage in Torchlight 2?

Source: Wiki article

I wear an item with 25 Physical Damage Reflected, which of the following scenarios is accurate?

• Damage Reduction
  • Monster attacks for 100 physical damage.
  • 25 Physical Damage Reflected mod kicks in.
  • Player receives 75 physical damage.
  • Monster receives 25 physical damage from Physical Damage Reflected modifier.
• No Damage Reduction
  • Monster attacks for 100 physical damage.
  • Player receives 100 physical damage.
  • 25 Physical Damage Reflected mod kicks in.
  • Monster receives 25 physical damage from Physical Damage Reflected modifier.

B is more accurate. Tested by going to the start of the game and having some monsters hammer at me. Alternated wearing an item that gave 15 armor and one that gave 15 armor as well as 15 physical damage reflect. The first armor never saw damage go over 15, so if A was accurate then I should not have been taking damage at all (or 1's) with the 2nd armor, but this was not the case. Damage is random so it's hard to say exact, but it didn't seem to differ between the two armors at all, the second one just slowly killed whatever was hitting me.

Additional

• Monster attacks for 100 physical damage.
• Player receives 100 physical damage.
• 125 Physical Damage Reflected mod kicks in.
• Monster receives ???

what sez

1. Player equips 188 damage reflected amulet
2. Monster attacks for 2 damage
3. Player takes 0 or 2 or 9999 damage, it doesn't seem to matter
4. Monster receives 188 damage

I gave my Engineer a Bale Amulet. Archers in Act I would peg me twice and die before I could even reach them. It appears to work like "Attacker takes damage of X" from Diablo II, except it also works on ranged attacks.

I think this gives you as much of an answer that you need.