The text reads "Each time a figure adjacent to you performs an attack that targets you, before dice are rolled, that figure may suffer two damage to remove 1 grey dice from your defence pool"

Does that mean I can make a monster lose 2 health? Or that the overlord would choose to have his monster lose 2 health? And if it's the latter, then since there is no overlord is the text just blank for RTL?

There either is (or needs to be) an appendix entry about this shield in the RtL rulebook because it is designed that the attacker (usually the OL) must choose to suffer the 2 wound or allow the gray die to remain.

For a house rule, I'd recommend the text be treated as blank for RtL, since monsters generally avoid "willingly" suffering wounds. That is, the shield essentially is just a free gray die.