Dev explaining stability : "Time it takes till either you or an ennemy gets stunned (on armored parts)"
There is no reason to trade blows with enemies. Which means that stability is pretty useless. Unlike the player, enemies rarely chain attacks and the player can just dodge out of the "combo".
Independently of the player stability, there are certain enemies capable of staggering the player in a way that prevent dodging out of a combo. If dodging isn't an option at those times, blocking is.
Video exemple :
As you can see in the video, high stability doesn't change anything for the player who can just block between hits.
If fast enough, ducking or jumping (after a block) can be done for a counter attack.
Concerning the defenses. It all depend on the weapon of the enemy hitting you, the player's gear and the limb the player is hit on.
The enemy's weapon stats are the same as the one the player can retrieve by cutting enemies arms.
All those variable makes it pretty bothersome trying to optimize defenses.
Incoming damage can be reduced by the drone module Anti-Kinetic Shield.
Physical defense can be increased with the implant Abblative Array v.2 (DLC A Walk in the Park).
Elemental defense can be increased with the Liquidator gear set bonus.
Physical and Elemental defense can be increased with the MG Cerberus gear set bonus.