Leech is fine, just not balanced, meaning you heal to much from your own blood. Perpetual motions are fun to find and boring to play. This is one of those cases. The problem is not that you heal from your own blood too, the problem is that you heal so much from it that attacking your own characters to make them bleed will replenish their whole HP pool.
It should mitigate some damage and not be a way to gain 100% physical immunity. Somewhat the same issue with all other damage types btw, once you reach those 100% all with leech the game is kind of over. The AI simply can not deal with this problem and does not notice that players have high resistances. A smarter AI would be very, very much appreciated. The AI in general is lacking once the combat gets even a little more complex. Buffs, Board Contro, Focus damage, all massively lacking on the AI part. That should be intentional, because making some a little smarter decisions should be trivial and just a question of time to spend on more complex decision paths. (Just give NPCs a memory about their effectiveness of their attacks and some more situational awareness. No need to attack fire-immun targets constantly still with fire, no need to have the AI use Bloodletting on leech characters.
