Yep this has been demonstrated a long time ago... unless this has been modified in the meantime. Maybe the defensive part won't work that way, but I don't see a reason why it shouldn't...
https://www.youtube.com/watch?v=Pg3YQFsKIoI
Actually they reduced XP, rewards, but monster damage also...
Yes I have hope there. This is why I will try to include a Sunwoko Monk with Wave of Light in my group setup, but since I want this dude to be able to perma-cast Inner Sanctuary, he won't do as much damage as a pure DPS dude. We'll see.