The health loss caused by this enchantment does not count as damage and therefore cannot be negated.
Attacks while under the effects of Illusionary Weaponry will still deal damage as these attacks do not need to hit.
Area of Effect spells cast near you and PBAoE spells, which are untargetable, can still affect you.
Like Spell Breaker, spells cast on a creature with Shadow Form on will not only fail, but also result in the caster expending the spell energy cost.
If you have a "While Enchanted" health bonus to an item you are holding, the Health loss from this skill is figured before the Enchantment Bonus. This can kill you when Shadow Forms ends, if you have 13 or less Shadow Arts.
Bug! If a player is targeting an opponent with Shadow Form active and uses a spell which targets an ally, the spell will be interrupted by Shadow Form instead of being automatically cast on the player.