I think it does. Or at the very least, it makes the equivalent of a +3 shield available a lot earlier and more reliably than what the game expects.
My intuition is that...
+3 weapons (and monsters?) would need to be frequent enough to "compensate"
The balance between wearing a shield and wielding a two-handed weapon would be compromised.
+5 to Reflex saves is huge. +2 is already a big bonus. At 1st level, it's the equivalent of being proficient, or expertise in Reflex save. 3/4 cover is the equivalent of proficiency for a 13th level character.
So despite the shifting of properties and damage dice and AC bonuses, you seem to be respecting RAW in all regards except for shield, which get a straight boost. Either because they can get used as weapons, or they grant a bonus to saves as well. Now than can be a design goal, and I'm ok with that, but at the moment by RAW that +2 AC is precariously balanced against two-weapon fighting and two-handed weapon fighting. Your shield rules (including parry property) upset that balance.
Potential solutions could include linking kite shield's AC to proficiency bonus. Or one may need to spend an action or bonus action to "raise shield" and get the cover bonus.