Each Shadow linked to Nekros will take a percentage of damage in his stead. Total damage reduction is determined by the number of Shadows linked to Nekros.
Damage transfer percentage is linearly affected by Ability Strength up to a cap of 90% damage reduction. This is obtainable by increasing Ability Strength to 214%, assuming all 7 Shadows are active and linked to Nekros.
By cloning summoning units such as Drahk Masters or Corpus Techs and having those summon their respective minions, it is possible to have more than 7 Shadows. These minions behave like normal Shadows and the ability icon will show the increased number of shadows. They will be linked to Nekros, suffer from health decay and contribute to the damage reduction, which is, however, still capped at 90%.
While the damage reduction from the augment is capped at 90%, one can potentially push this further by including Despoil and Health Conversion in the build. This would give Nekros a rather consistent 1415 armour equating to about 82.51% damage reduction. When taking both reductions into account, this brings Nekros to a total of about 98.25% damage reduction.
A link or two may persist well beyond the range limits of your current build, e.g. you being linked to a shadow 100+ meters away even with a reduced range build. This will cease once the shadow you are connected to dies however.