I'm just not sure. I'll try to explain it best I can, this might take a while.
Let's say you used this troop against a single-target Inferno Tower - he has a decent amount of hitpoints so the damage would get pretty high and he could help reflect this back. However, the single target IT would also destroy the Knight fairly easily because, for the same reason, he has a lot of hitpoints. A player might ask, is it worth this moderate amount of damage for just one attack?
This troop would also usually be ineffectual against Mortars - their range is so great that the Knight could not return the damage, not to mention the extremely low damage the Mortar deals, making it pointless anyway.
Scenario 3. You're against a level 4 X-Bow - the lowest damage dealing of all single target defenses at max level. The damage dealt back towards the X-Bow would be basically pointless, as the X Bow is also the strongest of all defenses.
Scenario 4. You're against a rushed base with tons of level 1 defenses. The damage dealt back toward them would be so insignificant and tiny, as they would do barely do any damage themselves. AND not mentioning that you don't even return the full amount of damage until level 3. So that would mean that when being attacked by a level 1 archer tower, the Knight would return a whopping 7.7 damage - that's not so much.
The only time this unit would be of any help would be when a) against a high-damaging defense (Single Target IT) That would kill him quickly anyway, or b) if the defender has high-level defenses, rendering the Knight useless once again. The housing space of 25 is ENORMOUS meaning no one would want to put this unit in their army camps because it is too much of a risk - is he going to be useless against level 1 defenses? Or is he going to be destroyed in a snap by high level defenses?
Hope you understand, and I think it helps to ask yourself: How would this play out if it were in the game? Would people use it? Why or why not? You have to be honest with yourself.
Listen, don't think I'm hating on your idea or even you for that matter, I just don't think this idea would quite work in the game
(Phew, that was a lot of typing

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