You have Torgrim, level 20, and your opponent just has a hero with resistance, let's say, Bron. Torgrim uses Armageddon, and it hits himself harder than it hits Bron. That's all I'm saying.
However, if he fights against Bron with Expert resistance, Torgrim's Spell Power becomes 14. This means the damage of Armageddon is 590. This is the damage that will be dealt to both Torgrim's creatures and Bron's creatures.
Bron's own resistance only affects Torgrim's spells, and it doesn't play a role in the calculations above.
Resistance simply reduces the power of the enemy hero's magic. It's as if he forgot to wear an artifact before the battle. The reduced power is displayed in parentheses in the hero's window, and only this reduced value is relevant during the battle.
The new resistance doesn't have any tricky hidden properties that depend on who the target of the spell is. It's much simpler than the Sphere of Vulnerability.