Tried it on Tuesday with my Greater. At just under 110 taming/120 lore, I still had to heal him regularly.
I helped a guy tame a Greater last night, bringing my own to tank. Turned on consume damage, let it wander around, and at one point it had 4+ dragons and 2 Greaters on it. The HP bar DIDN'T MOVE AT ALL. Naturally, it took a little time to kill everything, but I could easily go into pretty much any dungeon, leave my dragon in an area with heavy spawn, and as long as nothing aggro's on me, it would NEVER die.
Against certain things the ability doesn't seem to work, since they do a large amount of damage: Slasher/Stygian Dragon and Scalis are definites. I would assume Corgul and Blackthorn Captains fall under that umbrella as well.