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As you play more and more, the save file builds up, due to the constant changing of item placement. This is the bad part of the Creation Engine, they still can't fix this. I don't get it, but hopefully they make a patch.
Huh. Sorry I doubted you. I had to go into the game file to make sure, but sure enough, it is calculated as a chance, not a percentage, interesting game mechanics.
You will still take full damage from the attack, but you will absorb half of the damage they do, and turn that into magicka. 100 damage spell, 50% magic absorption, you take 100 damage, but gain 50 magicka.
What Bethesda basically did was, they made smithing level up like alchemy. Thus, the more valuable something you craft is, the higher your smithing will go up.