Increasingly the last few days I have seen some Guardians from lvl 27 up with there head alight in blue flame. It does not seem to be their equipment.

What is causing this effect?

I believe it's an effect you get from completing the Nightfall strike. I think it might also come with a week-long ability buff.

Increasingly the last few days I have seen some Guardians from lvl 27 up with there head alight in blue flame. It does not seem to be their equipment.

What is causing this effect?

I have it right now :-D

It means you beat the Weekly Nightfall Strike and resets on Tuesday along with the 20% bonus you receive on all experience and reputation you gain (except the Queen's).

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I wish the flame lasted longer, but it's still really cool.