After some extensive tank-and-spank sessions I noticed something weird. Slaying potions actually make you take MORE damage, not less.
I tested this with Undergrowth Webber on new TA path getting hit multiple times with and without Nightmare Court Slaying. Then I went to Arah and tested same with Undead Slaying on Orrian Villager.
You will still deal more damage so at least that part works.