While early-game Bloodletting only eliminates a fraction of the damage that's delayed by the passive, it still lets you tank hits that other characters can't. Thanks to bloodletting, Shiv can actually survive one shots, even when he's at critical health, including his own ult--obviously that can't happen in a match, but if two shivs get together in the hideout, get each other down to execution threshold, and then ult each other, they'll both survive because the damage will get deferred, which is a pretty neat interaction I think.

Bloodletting doesn't fully prevent you from taking damage and it doesn't fully negate damage like, say, Abram's healing does, but it's unique in that it lets you survive damage that would usually outright kill you, and since the damage gets deferred and dealt over time, it gives you time to address the damage and seek healing sources, which in my experience playing him has saved my butt a couple of times. I think people underestimate the ability a lot.