I have tested and confirmed that siphoning attacks is not working against shielded targets. This has become a much larger problem in 1.6 because shields have become exponentially stronger, rendering this great ability nearly useless. Here is the video:

https://www.youtube.com/watch?v=mm0YZacna-I

After rewatching the video, the only time that there is any return of stamina/magicka is when the shields break and damage is shown. Some say that this is intended and not a bug at all, and I would like this officially clarified if that is the case.

"While toggled, basic weapon attacks restore 3% Magicka and Stamina, but Weapon and Spell Damage reduced by 24%. 10% chance all attacks to restore 15% Magicka and Stamina."

The tooltip reads that it is supposed to give the resource return "on attack" and not "on damage' so I do hope that it is a bug.

@ZOS_GinaBruno @ZOS_BrianWheeler
If it is indeed intentional, then I will have to alter my build significantly and possibly remove this ability all together. Please let us know either way.

PS

My solution: Let players keep the damage shields, but allow proc abilities and crit damage to calculate as if there was no shield active. At the same time allow shields to inherit all armor and spell resistance as well, so that players can utilize both types of abilities if they wish to make their shields stronger.