I think it's a meter that determines how far Link gets knocked back when defending himself (as we all know that's what happens in this game). If it reaches the top, he falls to the ground. That's just what I think it might be, if it is a shield meter (which is what it looks like).
yeah, I think the meter goes down with the hits and regenerates with the time (slowly please) and depending in the kind of attack and how much filled is the meter maybe itcan go from
(reflect?) > block > no damage but knocked > knocked + damage