Thanks for all the feedback! Here are some thoughts.
You got the defeated part right, once you are in weak hold and fill your stress clock, you are open to be defeated and taken out.
Good catch on the consequence, I will be changing that to make the intention more clear!
The system was built with the idea of playing short but dramatic seasons of play. So when you start a new season you activate factions relevant to the situation, usually those with negative and positive status as part of character creation. RAW you play a turn every time the players finish a score, or you know they are going into downtime at some point in the next session. The main reason is so you can manifest the actions in play through their contacts and offer new opportunities for scores in free play.
Now, this is often how I do Blades. Big scores and even bigger downtime, each phase often taking one session +. I believe some people do more phases in less time, so it's easy to change that if you think less turns would make more sense.