Effects in the second category that *do* break the soft-cap are incredibly powerful and useful, just hard to find. The ones in the first category are less so, but sometimes if they're cheap enough, it can still add up. 20% off 800% is still 2.5% less damage received, so if you can get it for just a passive point or two, it's totally worth it. It's just not the 20% less that some people expect. Also, at lower difficulty, this effect is much stronger: 20% off 25% increased damage is basically eliminating the level penalty, or at least the incoming damage component of it.

That's actually one of the reasons Persistent Attrition got changed in the patch. Previously, it had an additive -20% damage penalty for enemies with dots on them (that underwhelming first category). For a perk slot, that was terrible. It was changed to blind enemies with dots on them, which is actually one of the rare "third" categories where it's somewhat multiplicative---blind gives enemies a 50% miss chance, which means 50% less (amortized) damage received. That's much stronger.

There's two ways these things (less enemy damage) usually work, and it's never a % multiplier on enemy damage. If you've played PoE, throw away the idea of a more/less multiplier---there's only a handful here, and they're all big, fundamental aspects (crit, vulnerability, deflect, etc.) not passives or perks.

1) It applies a negative damage bonus to the enemy. Sort of like equipping an enemy with a "-X% damage bonus" item. These are usually bad, since in high difficulties, enemies are dealing +800% damage, and these bonuses are *additive*, so knocking off 20% from 800% is still 780%.

2) It applies a damage reduction *buff* to you. If you're lucky, these break the soft cap (60% DR), but sometimes they do not, which means if you're already at 60% DR, you get nothing. Think of it like having an extra X% DR versus enemies in certain states. Note that this almost never shows up in the character sheet, since they're usually situational.

It's usually very difficult to tell which scenario you're in without looking at the game files, and even then, it's often not clear. I checked out demoralize's config file, but I'm still unclear what it's doing. I believe it's in the second category, but I'm not convinced it's actually working properly, so I don't want to make claims. If I end up figuring out what's going on, I'll try to follow up here.

The Dirty Fighting description is definitely out of date and is on the list of things to fix. The patch notes are correct.

I'm less sure about demoralize. I've asked, but I haven't gotten it figured out yet.