Damage taken gained as mana, works like reflect/leech?

"% damage taken gained as mana" occurs just before the damage taken is subtracted from ES/mana/life. If you're on full mana, it will do nothing, but if you're on no mana, you'll gain it just in time for mind over matter or similar to use that to absorb some damage before life.

This way is better for the player, because it means you gain the mana in time for it to absorb some damage, potentially turning a fatal hit non-fatal. Outside of the cap on maximum you end up on the same total mana afterwards, so the only major difference is whether it adds to survivability or not, and this is the order in which it does.