Bodyguard B Ignores Divine Shield

This is why I consider it a bug - Divine Shield only stays active for the next 6 monster attacks, regardless whether it guards them - they can be magic (no guard) or other MISSes (due to avoid and Guardian) and you still take damage. It's just physical attacks that it will prevent damage from.

I wouldn't mind if it took precedence over avoid/guardian, and showed GUARD instead of MISS, but taking damage and losing the hit at the same time is nonsensical.

I agree with this. Iit shouldn't drop a count on Divine Shield unless it actually guards the full damage. So misses and magic attacks shouldn't drop a count at it's current state. It would also help sustain Divine Shield giving the Paladin maximum DPS for a while.