How does it actually work, and what are your options? I found this
slightly fiddly so I thought I'd arrange it differently to try to make
more sense of it.
I'll talk about contests of skill. so to define that: both sides
compare their skill rolls, higher success level wins, if same success
level higher roll wins. (If you have the exact same roll, I suppose
it's a tie.)
A combat "turn" is "a few seconds". Actions happen in descending order
of DEX. You get to do one thing in the turn; a guiding principle is
that you only get one chance to do damage in a turn, but it may not
necessarily happen when it's your spot in the sequence.
Let's say A attacks B with a firearm. A rolls a skill, probably
Firearms. If it's a hit, a weapon with damage rolls its damage; a
weapon with Lethality rolls d%, killing if the roll is ≤ the Lethality
number, otherwise adding the dice values and doing that much damage.
Arrows and grenades, which I'll call "slow projectiles", work the same
way, but may potentially be Dodged. This works like a hand-to-hand
dodge, which I'll talk about next. A Dodge against firearms can only
be used to get into available cover.
The same principle applies with a hand-to-hand attack, but B may be
able to defend.
If B's action has not yet come up this turn, B may choose to abort
whatever they'd planned and spend it on Dodge or Fight Back. In either
case, they choose an offensive action (attack, called shot, disarm or
pin) and make one roll now (vs Dodge, Melee, or Unarmed Combat, as
appropriate) which will be used to oppose all relevant attacks for the
rest of the turn (so Dodge vs all melee and slow projectiles, Fight
Back against all melee). Success means the attack is ineffective. If
Fighting Back, they may choose one attacker to strike at, and if B's
roll beats their attack roll B can do damage to them. In any case, B
will not be taking an action when they come up in order of DEX.
Alternatively, B may choose not to defend, and do whatever other
action they had planned if they survive.
If B's action has already come up this turn, the choice is made for
them: if they had already performed a hand-to-hand attack they can
reuse their roll to Fight Back against other attackers, though they
don't get to do extra damage; if they had Dodged, they continue to
Dodge with the same roll; if they had done something else, they don't
get to defend.
So if A and B are engaging in hand-to-hand combat, A attacks B, B
chooses to Fight Back, whichever of them wins the contest gets to inflict
damage on the other. If A and B are ganging up to fight Z and Z fights
back, Z chooses A or B as the targets of their potential damage when
they make the Fight Back roll.
If anyone else shoots into this hand-to-hand combat, they need to do
it with a Called Shot (-20) or they'll attack a random target. If that
target is Dodging it's still useful against slow projectiles, but
nothing will oppose a Firearms attack.