This material will act as protection and water will be diverted to the drain, which could also prevent mold from forming. You must waterproof all the walls of the shower before laying the tiles. A tile backing or cement board is usually not waterproof, although many are water resistant. The most effective and reliable solution is a separate waterproofing membrane on the primed shower walls before tiling.
Liquid waterproofing should be applied to all surfaces of the shower area that encounter water or moisture. I basically paint all the surfaces that will receive tiles in the shower, including horizontal areas exposed to moisture, such as shower benches, shelves, half walls, niches and especially the shower floor. Liquid waterproofing membrane is exemplified in the most popular of these products, Redgard Waterproofing Membrane from Custom Building Products, although other brands exist as well (more on this later). This video shows exactly how to properly waterproof an entire shower with a mud shower tray, using your Kerdi waterproofing system.
Before waterproofing membrane systems were developed, there really was no waterproofing strategy consistently applied for shower walls, except for the shower tray liner, which usually went up the wall only about 1′ above the shower base. The new technology of waterproofing membranes for showers has basically solved all the problems of the past by placing the waterproofing layer directly under the tile layer and combining it with the decoupling. As I mentioned in my waterproofing membrane post, I would prefer to use your Kerdi DS or the other permanent ultra low sheet waterproofing membranes. I would recommend not using anything other than liquid waterproofing sheets or membranes designed for shower waterproofing.
Painted liquid waterproofing products now allow contractors and DIYers to easily and efficiently waterproof a shower. The low permanent waterproofing membrane (Wedi, Durock, NobleSeal TS) applied to the surface of the backing plate will be the only waterproofing layer required for this wall.