I've looked around the Rules Question board and elsewhere online and I've yet to find anything that properly explains what dizzying defence is actually meant to do.
At 15th level, while wielding a light or one-handed piercing melee weapon in one hand, the swashbuckler can spend 1 panache point to take the fighting defensively action as a swift action instead of a standard action. When she fights defensively in this manner, the dodge bonus to AC gained from that action increases to +4, and the penalty to attack rolls is reduced to –2.
At first it seemed pretty straight forward - you get to make all of your attacks at a -2 penalty but get +4 to AC as a swift action (basically improved fighting defensively). However, looking at the fighting defensively as a standard action rules, the whole fighting defensively thing seems kinda weird; for reference, these are the fighting defensively as a standard action rules:
You can choose to fight defensively when attacking. If you do so, you take a –4 penalty on all attacks in a round to gain a +2 dodge bonus to AC until the start of your next turn.
For one, I'm not sure how this is meant to work as if you've spent your standard action to fight defensively then you can't attack besides AoOs; the rules (RAW) don't say you make an attack, just that your attacks are at a penalty and this costs you a standard action (a bit like the problem with monkey lunge).
With dizzying defence making it a swift action, couldn't you apply the penalties after you've attacked (meaning the penalties are just for AoOs)? I've also heard people say it gives you an extra attack as a swift action - I don't think this is right as fighting defensively never says it gives you an attack, but I'm not sure as it's suggested a lot that it does. Is it just improved fighting defensively?
An FAQ on this would have been really appreciated from Paizo.
Seems like the swashbuckler ability lets you "turn on" an improved defensive stance that does not stack with fighting defensively. Since this is only a swift action, this would still leave you able to use a full attack action before hand. Your penalty to attack would only affect your attacks of opportunity, and you'd still have the full AC bonus during your foes' turns.
Fighting defensively normally consists of taking one attack as a standard action with the given penalty to hit and bonus to AC applied during that attack and until your next turn.