From what I understand,
1. Ships within the radius of a Guardian's Shield Projection (this also includes structures) will have 33% of all damage they take directed to the Guardian using the ability.
2. The Guardian stops using Shield Projection by the time its shields are depleted. It will not use SP when its shields have depleted or are near depleted.
3. The Progenitor recharges the shields of the Guardians themselves, therefore allowing the Guardian to continue using SP for a longer period of time, since it can continue to recieve damage in place of your other ships.
4. Outside of the stacking bug initially present in 1.1, no. Since Guardians can be shielded by other Guardians, in theory, if one Guardian takes 33% damage that another ship has taken, a second Guardian shielding the first can take 33% of what the first Guardian took, and so on. In effect, the damage is distributed across your Guardians, if this is how the ability works.
5. Performance-wise, its not a good idea unless you don't mind the game suddenly dropping in performance due to 10+ Guardians using SP or having to look through a sea of white just to locate a ship (the visual effects DO stack, which means that if enough Guardians are using it simultaneously, it will make that region of space solid white).
