In the combat example given.(The bit with Carrow and the spear and whatnot) the attacker rolls 4 nudges. The defender rolls 1.
Now, it explains that Conflicts generally follow the rules of contests, meaning that the defender's 1 nudge should go toward mitigating his failure to defend. It would seem to me this would reduce the damage he takes by one, but the nudge is completely ignored; it never gets addressed. I'm unsure how this is supposed to function.