Pain reflection itself is pretty broken, if I got told correctly. Having 10 points in it would make you pretty much immune to any kind of direct damage, because 100% gets reflected at this point. Never tested it myself so far, so only know it from hear-saying, so feel free to correct me, if I'm wrong.
I'm quite sure that Larian would be able to spot the flaw of an ability which makes players immune to damage, so I don't think it works like that.
I'm not sure how it works myself, but if it doesn't reduce the amount of damage you take, it only reflects some of it back, then you can't be immune from harm. If it does reduce damage you take, it can be capped at 50% effectiveness or less.