In case someone else is curious about defend mechanics:
I dug around the code and it seems to work... strangely.
Damage from row and defending are thrown together into one value.
Basically the game calculates a "distance", as multiple of $40, and adds "1.5 rows" as $60 if you defend and then uses that as a x/$100 damage reduction.
we take a big boss, lets say Daos.
The top-left position has a distance of 0 to him, because he is in the top-left slot and vs a "big boss".
The top-right slot has a distance of 1, the CM as well.
The back row has a distance of 2.
Smaller enemies actually have proper front end back row (+1 distance); there top left and top-right hero have 0 distance and our backrow 1 distance.
So back to my example, Daos uses Dark fry (inflated base damage of 2k), Guy was too slow, so he couldn't guard. Since he is also in the top left slot he has a effective distance of 0, so takes full damage, 960 to my surprise - I thought he'd survive with ~500 since I ordered defend, but no, it only works when he acts before -> R.I.P.
Selan in the back row (2 distance) successfully used defend beforehand.
So she gets additional damage reduction; 2 from distance times $40 + $60 from defend,s o $E0/$100 disappear, in other words 87.5% damage just disappears.
In the real battle she just took a bit shy of 100 damage.
a few snippets of the code for the curious: