Regarding the 25% MP return on the AF piece...

You just need to take damage, period. That's all there is to it. The game just checks (1) Do you have cover status active? (2) Do you have AF equipped? If the answer to both questions is yes then you get MP back. There is no relation to who has hate, who actually has hate without cover, magic vs. physical damage, who's in or not in range, etc.

Regarding what damage you can "block"...

Try to think of cover as a hate shift ability and not would you would "logically" think cover is. The game likely checks cover as

(1) Who has hate?
(2) Does the person with hate have Cover status?
(3) If yes, is the person using cover within 8 yalms?

If all 3 answers are yes, then the game tells the mob that the PLD has hate, and it directs ALL attacks towards you. It literally just acts as if you're the player with hate. There is no "I can block this move but not that move" going on. It is simply a hate shift mechanic.

To further clarify this, say you are fighting a mob with AoEs. You cover your target and are within 8 yalms. It will act as if you have hate so it directs attacks towards you. Now say it uses an AoE TP attack. It directs that TP attack towards you, but it can still incidentally hit the guy you were covering. This is because all that has happened with Cover is a hate shift, not some weird form of "blocking" damage (like say in FFXI).

Hope that clarifies things for you.