Seth,
This formula is a custom measure (“Issues count by epic version”), and it is designed for use in the report like you describe. Please, find attached a screenshot of a report where I tried it out. The report is giving the number of stories (as selected on the report pages) by status and counted to the Fix version taken from the related epic:
The measure should work also when you replace the “Fix version” dimension by some other dimension created from some custom field if that is your use case.
Janis