For what it's worth, this was the issue in the playtest that caused one of the players to ragequit. Back then, you'd subtract your armor score from the damage of an attack, and then compare it back to the table, so you might spend a slot and not have it make any effect, or have to spend multiple slots to do so.
In the final game, you determine severity, then spend a slot to simply reduce it by 1. I think that's a lot simpler and it has worked for a different group I ran for.
What you get rid of here, is dealing with large numbers. A 5E monster can easily have over 100 hit points (or even more) and having to subtract is something of a barrier for players. Just having a small number of hit points and then converting damage into 1-2-3 damage is clever. The question is, is it too clever? Does it offer enough as opposed to dealing with big numbers? Don't know yet.
I will try to keep this brief so that I do not take away from the '+' nature of the thread.
The group I play with does not mind steps to a process. We enjoyed a lot of sessions of 4E. 4E had steps, but those steps were usually meaningful. Similarly, Soak in Age of Rebellion involves comparing an armor value to damage, but it works.
-In Daggerheart, I am not sure that I understand generating big numbers just for the sake of generating big numbers and then including another step to make the big numbers into small numbers. Just give me the smaller numbers. Give me cool fiction-first effects or things that alter the ongoing scene to keep me interested rather than throwing a bunch of numbers at me that don't really mean anything.
Related to that, my group found that the Tag Team moves sometimes end up doing less than if two characters had done things separately. So, the game is presenting that as a possible extra step to (in theory) get more reward from an action, but the end result is taking extra steps but getting less reward. It did not happen a lot, but it did happen enough that it was a buzzkill for the group. When it worked to produce more damage, it was cool. Spending limited resources and taking extra steps to get nothing was not so cool.
+There are a lot of neat ideas in Daggerheart. The spotlight system works better than I thought it would (though my group had to use the token option so that introverted or shy players did not get shut out of the game). I think the game is good to tell a story over 5-7 months. My group meets more regularly than most, so that 5-7 months is probably more like a year for many groups. I imagine that is well suited for a lot of groups and for events in a game store. (For my group, it will likely be a good palette cleanser for when we are in between longer campaigns for other games or a system that we borrow ideas from to use in other games.)
+Player engagement is something that Daggerheart puts effort into, and I think that is good. The only thing worse than sitting down to hack through D&D monster HP is sitting at the table and watching other people hack through D&D monster HP because it has not been your turn in 20 minutes. Daggerheart puts a lot of working into keeping people at the table engaged in the game, and I like that.
+There are a lot of good things about Daggerheart. I think that a lot of people looking for an alternative to D&D may settle on Daggerheart and be very happy with it. (And, honestly, if you're coming from modern D&D, I think Daggerheart will likely be a more engaging and more satisfying experience than something like Shadowdark.)