I'd rather it was a muscle because those heal up, nerve damage can take forever to recover, if it ever does. This is concerning.
I'm curious about whether this is a diagnosis of "dead arm", or just Jrue's way of describing the symptoms.
Generally, in a sports context, dead arm is more of a fatigue issue, which does involve muscles and tendons. However, the description of how the injury came about, due to a sudden impact, could be either muscular or neurological (and wouldn't generally be "dead arm" in the traditional sense, although his arm might feel dead, numb or lacking in sensation.)
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I'm dealing with a different type of shoulder injury ("frozen shoulder"), and I got a cortisone injection that reduced my pain and improved my movement by 90%. I know nothing about medicine, but I wonder if that's being recommended for Jrue. I know he's on anti-inflammatories.
I had frozen shoulder also, resulted from playing hockey. I don't recall any specific collision or impact that caused it, it seemed more cumulative. It took a long time for it to feel normal again, but I am much older than Jrue Holiday.
As to playing him, I would not over think it. If it is healed, play him. Even if they aren't sure, but think it is healed, go ahead and get him on the court to test it. Obviously you don't want to do anything that will damage it further, but if is that vulnerable to reinjury, it probably isn't healed in the first place. But if you wait until there are only 3 games left or whatever to test it, you are stuck.
Maybe resting him more is the better course, but determine that based on the health of the shoulder. You aren't going to say, shoulder looks fine, but let's not play him for another 2 weeks just in case.