Completely agree here. You can add 'and Parries reducing Attacks'.
In Shadowrun, this was called the 'geek the mage' effect.
Yes.
Exacerbates, yes. Game breaker, can be.
Yes, it seems. You need now more opponents, because whatever, the parry is reduced to 100%, and after 6 opponents, both attacker and defender will be reduced to 05%. Combat can becomes very long, although the above 100% rule was supposed to shorten combat by avoiding the wait for criticals at high skill levels.