The exact wording says that it increases the party's "defense" but I'm wondering if that's exactly accurate. Does our Limit Break only protect the party against physical damage? When I ran Garuda my party told me to pop Limit when she uses her big explodey-death move, but I don't know if it did anything to mitigate that.

TBH, if our Limit only boosts defense (in the same way Foresight does) then I am severely underwhelmed. What is the duration? A couple seconds? I've never seen a time where the entire party takes a huge chunk of physical damage that would require our Limit to survive. Maybe Titan, but even that might be largely magic damage, I don't know.