To be fair, i think the glitchmode changeling build causes both visual and audio issues with some people because of all of the flashy lights and sounds.
According to City of Data, it definitely does damage.
https://cod.cohcb.com/html/power.html?power=dominator_assault.icy_assault.chilling_embrace&at=dominator
But only if the mob isn't asleep. Are you attacking mobs that are sleeping by chance?
I think since the last patch hit live (Page 3) the defender version has been fixed, and the corruptor version was never affected to begin with. So you should be all set.
One thing to note, is Combat Jumping provides the same defense values as hover, for about 1/10th the endurance usage. It also provides unsuppressed movement control
Some of this is explored in the alignment missions/tips you can do. As for having the mobs in the wild reflect this? Aside from the 'neutral' stance, which is used a lot in Praetoria and the Wharf, I'm not sure how this could be implemented.
Nothing is being 'balanced for super IO builds'. Yes, 4 star content exists, but its not required for anything, and really just gives novelty items which have no effect on the overall game. Its an addition, not a rebalance.
Not that this is really a check, (though it could be?) but has the character in question completed the 'Who will die?' arcs? I know they are technically canon already, but maybe they aren't canon to your character yet.
To be fair, any pet that you can put in defensive follow contributes to bodyguard mode, but normally only mastermind pets can be put in defensive follow. The main exception to this is the Lore pets. They contribute to bodyguard mode for the duration they exist, at least they used to when I tested them last.