As written Baduin's system gives the same mathematical odds as the RAW with an additional 2 to the toughness save difficulty (17+damage vs. 15+damage) and no toughness penalty for wounds. This plus the limited number of hurt and wounded states seems a good compromise. Baduin transfers the roll to the attacker, which is fine, but it is a very non-standard type of check, particularly since you have to exceed a number by 5.
Here are my modifications:
1. Do one of two things:
a. Make the base toughness for a medium sized creature 5 instead of 0 (4 for small, 7 for large).
b. Make the base damage check difficulty 5 + toughness, Con, Feats, etc.
Either translates into a "damage check" vs a difficulty with no +5 for the first increment. Match or beat the difficulty like normal check rules.
2. True20 (this is not a Baduin thing) uses distinct terms for shaken and stunned that are not also damage states but confusingly uses the word Dazed both as a non-lethal damage state and the penalty that applies from being Dazed for one round (and also from other things like Powers, etc.). You can get Dazed  from Dazed  or from a completely different source not involving Dazed . When you get Dazed  from Dazed  and Dazed  ends, you still have Dazed . To make this less confusing, I keep Dazed as a non-lethal damage state and added the new term Muddled to be the temporary condition resulting in the loss of actions except reactions for a round. You can Cancel all Stunned and Muddled conditions with a point of conviction.
3. Baduin does not make it clear (to me) but I assume he allows damage to overflow up one step and no further. I have made that explicit.
I'm not sure where "standard or strenuous" comes from. The RAW seems to just say strenuous so, so do I.If a disabled character takes a standard action, he falls unconscious and begins dying on the
following round. The same happens when he performs any other strenuous action. Strenuous actions include moving
all out, attacking, or using any ability requiring physical exertion or mental concentration.
The first part preserves the RAW balance between attacker and target but I really don't see a compelling reason not to treat this like any other check and allow the attacker to re-roll. It keeps the rules more uniforms and any advantage is offset by the loss of the point to use another way. The second part is very complicated and requires some back-channel meta-gaming between the player and the attacker for the player to know how the attacker rolled. It also violates the rule of not knowing the effect before deciding to re-roll. I'm sorry but this is a bear to run and I try to limit player meta-game knowledge during a combat.Conviction: The attacker cannot use Conviction to re-roll the damage roll. After the attacker rolls for damage, the
target can expend a Conviction point to reduce the injury by two steps (in effect subtracting 10 from the damage throw)
BUT ONLY if the attacker rolled 11 or more.
I set out to see what the normal re-roll rules mean mathematically. There are only 200 combinations between a d20 roll and what is essentially a d10 reroll (d10+10 for other rolls when you want to roll high). It is very easy to do in a spreadsheet. The result is that on average, your re-roll and pick max (or min in this case) improves the roll by 5.8 in your favor. In fact, if you only re-roll the 15 least advantageous initial possibilities, this average improvement goes down to 5.1 points in your favor. Instead, I say you can use conviction reduce the damage you take by one step without having to know how your attacker rolled.
House Rule: damage check rolls are d20 for piercing and non-lethal (1 at most wounded/dazed=5%), 2d10 for slashing (2-3 at most wounded=3%), and 3d6 for bashing (3-5 at most wounded=4.6%).