This is a somewhat complicated issue that was suposed to be adressed already in CP however as of version 2.0.5 and game version 5.0 still persists.
The way Confounding Blind (CB) additional deflection malus works is that it has three values: base value, adjustment value and max trigger count.
To better outline the diferences between vanilla, CP and this mod I'll outline it here, for an enemy with 100 deflection. 
On first hit, both base value and the first count of adjustment value are added.

Vanilla:
1st hit: 100-10 (Flanked) [-6(-3 base + (-3)value adjustment)]=90    As the -6 doesn't stack with -10 as they both come from an active ability that, per  
2nd hit: 100 -10 (Flanked) [-9(-3 base + (-6)value adjustment)] = 90general rules, don't stack.
3rd hit: 100 - [10 Flanked] - 12 (-3 base + (-9) value adjustment) = 88     Only on third hit does the malus from CB exceedes the one from deflection.
4th hit: 100 - [10 Flanked] - 15 (-3 base + (-12) value adjustment) = 85
And so on until we get to 
10th hit 100 - [10 Flanked] - 33 (-3 base + (-30) value adjustment) = 67 and the total value of the malus tops out at -33 Def



CP:
1st hit: 100-10 (Flanked) [-4(-2 base + (-2)value adjustment)] =90           Unfortunately the same rules apply, below is my testing results, however it 
2nd hit: 100 -10 (Flanked) [-6(-2 base + (-4)value adjustment)] = 90        was supposed to work in a way that the initial malus from flanked stacks 
3rd hit: 100 - 10 (Flanked) [-8 (-2 base + (-6) value adjustment)] = 90      with subsequent ones from base value and adjustment values being added with 
4th hit: 100 - 10 (Flanked) [-10 (-2 base + (-8) value adjustment)] = 90    more hits on the target. That is sadly not the case.
5th hit: 100 - [10 Flanked] - 12 (-2 base + (-10) value adjustment) = 88 Only on 5th hit doeas the malus from CB exceedes the one from deflection.
And so on until we get to 
11th hit: 100 - [10 Flanked] - 24 (-2 base + (-22) value adjustment) = 76 CP changes actually make CB worse as it tops out at -24 Def



This mod:
1st hit: 100-10 (Flanked) [-10(-7 base + (-3)value adjustment)] =90The base and adjusted is totaling -10 so on first hit it is already on par with flanked.
2nd hit: 100-10 [Flanked] - 13 (-7 base + (-6)value adjustment) =87We get the first change already on the second hit.
9th hit: 100-10[Flanked] - 34 (-7 base + (-27) value adjustment) = 66 And the total value of the malus tops out at -34 Def



Alternate version has the base value 10 and just gets to max on 8th hit instead of 9th if you want to have it rack up faster. However I belive that to work most as intended in vanilla and be truly stacking with flanked and act as in the CB description, you need the main version.

On simmilar note, when I was investigating the issue I also found an issue with how deflection malus from persistent distraction stacks with other effects. You can download the fix here, and of course read what the issue is.

Big thanks to Boeroer and Elric Galad on Obsidian forums for helping with the investigation and offering insght on balancing the effect.

All best!