Whew, Finally I tested this and found out, that ....
Defiant will only activate if your stat is directly lowered
Meaning, That if its baton passes, Psyched up, Power swapped, any of the above, it won't activate it, it has to be directly lowered by the pokemon.
-I Did test this.
Also, I just want to say this was a very interesting question to test and answer.
And the Multiplier is
+2 stages for Every 1 stage Dropped.