I'm having trouble figuring out how Shields work.
Do they grant dice like Electrum(Dice granted the first time Defense Dice are granted in a given round) or do they grant dice like Feruchemical Zinc. Dice that apply to every defensive roll and reaction throughout the conflict?
They apply to every defensive roll - so if you have a large shield, you automatically gain 2 dice every time you defend.
Secondly Iron and Steel reaction rolls say that if three nudges are rolled you can redirect the attack at a new target that isn't the attacker. Is this like catching a beat. Do you use action dice to make an attack roll or do you use the reaction roll as the attack?
This is not like catching a Beat - you don't necessarily have to have the dice on hand. In this case I would treat it like this: 1) roll reaction, 2) tally whether you have enough Nudges, 3) choose a new target to take the exact same attack you suffered instead. Thus, if they wanted to defend or react themselves, they could do so using the original attack's Result. The Nudges, rather than your own roll, are the cost of making this attack go against someone else.
Last thing-Someday Feruchemical Zinc, Allomatic Steel/Iron Twinborn will be super awesome at using reaction rolls because they can always manage 10 dice reaction rolls. If I have an Inquisitor that does this with Steel 7 and 6 defense dice for every reaction and defense roll(spent 60 Zinc Charges) Are the two dice wasted or are they nudges?
I would follow the line in those Stunts about adding Action or Defense dice, which clearly states you can't go above 10 dice as usual. My suggestion to the dude would not be to waste so many charges