Hey, Sega, will you be taking any notes from FF7Rebirth for any of the character specific balancing changes? Because if so, I feel that Nanaki's "Behemoth"-like playstyle (taking hits while defending to charge a super mode) from Rebirth would benefit him a lot.
And to keep him distinct from the other tanks, you could rework his passive into being a huge damage boost for his next attack (whether it's a basic attack, Deathblow, a spell, or a limit), but keep him being Yuffie-levels of fragile so there's some risk/reward in having him facetank attacks for his teammates, while also having players consider not just slapping Counterattack materias onto him like Barret and Cid want.
Funnily enough, his current innate in the 2.1 prototype build was based a bit on his Rebirth behaviour; when he takes 10 hits, he gets the following:
+40 STR/MAG & Regen
Issue though is that it has the same kind of flaw that the current 2.0 one has; doesn't benefit much in random battles which will be over before it activates. I could try and implement what you suggested, store hits taken when he's defending and then try to buff his next action or have him loose a buffed attack within a time-frame of, say, 2-3 turns but I'll need to experiment with it to find something that can be made use of fast enough to make an impact.