You're not crazy, trying to heal in Nioh 3 sometimes doesn't work - and Team Ninja is fixing it 
Nioh 3 has received a hot new update that brings plenty of bug fixes to very specific issues, but it also implements fixes for a few of the most common - and incredibly annoying - bugs. Patch 1.03.01 arrived earlier on all platforms, and it comes with a chunky set of notes.
https://ift.tt/2SYevsw