You're on the right track. Absorb is mechanically identical to hit points, but it doesn't regenerate. The logic flow goes something like this:
1. Does the attack pass the tohit check (after factoring in Defense, +ToHit, etc)? If not, the attack misses.
2. The damage effect is resisted by damage resistance and its magnitude reduced accordingly.
(damage for each type is actually accumulated here, HP isn't touched until all damaging effects that tick have been processed*)
3. Does the target have any Absorb? If so, subtract the calculated damage from that.
4. Once all Absorb is depleted, subtract any remaining damage from Hit Points.
I believe most powers that granted Absorb typically used your MaxHP as a base to calculate how much to give you, but that's not a firm requirement.
Don't overanalyze Tomax calling it 'Max Absorb'. Absorb uses the Max aspect rather than Cur for fairly esoteric and ultimately irrelevant mechanical reasons, but it functions as a set pool just like HP or Endurance.