I don't think the suggestion is to take damage and heal at the same time (i.e. dreadspikes).

We're talking about something in-between Holmgang and Hallowed Ground. Drop down to 1 HP with Living Dead, and Walking Dead triggers. You're now invulnerable for the next 10 seconds, but can't be healed directly. Instead, any damage that you would have taken (and/or perhaps dealt) counts as healing. You'd have to be fairly selective in terms of when you use it. In places where there's a tankbuster followed by little to no outgoing damage (because of AoEs, etc.) or an untargetable boss, you'd potentially run the risk of sitting at 1 HP while being unable to be healed. But it would still be a significant improvement on the present ability. And it would actually give Living Dead a reason to be on a longer recast than Holmgang.

I suspect that the devs are evading a discussion on the subject because they don't know how to balance/rework the invulns. You could make an argument for removing them altogether.