Effect not OPT, so if players found a way to loop the Insect infinitely, they can win the duel in 1 turn, regardless of Rex's LP.
That goes against the whole point of Raid Duel.
Overall, Cocoon of Evolution is more useful. The only situation I could see this card being better in the current card pool is if you combo Fairy King Truesdale with Desert Sunlight or Labyrinth of Nightmare to boost Flower's defense by 500, but it's a real stretch to justify using this defender over Cocoon when it's only a difference of 100 points, and you can just set Cocoon without any of that trouble.
This card and the cocoon are quite different cards. This card can deal 800 LP dmg which is considerable. You can use Luster Shield plus Truesdale to make it a huge wall. 1600 def ain't that bad. Although, you can just use Catapult Turtle which is more generic.