An in-depth discussion of Leaky Defenses can be found in the Carrier Battles mod tutorial pages:
DEF 200 : Damage Theory and
DEF 340 : Armor Mechanics
DEF 340 goes into detail of the tradeoffs between thick (large, low hp/kt) and thin (small, high hp/kt) leaky armors, plus the effects of tech level on damage absorption rates.
Shield regeneration has nothing to do with leaky shields. As stated before, it is all about the shield generation from damage ability, which charges the shields between each hit.
An additional bonus is if you have strong leaky shields plus thick armor; If the leaky shield points are greater than the weapon damage, and each armor component has more hitpoints than the weapon damage, you can actually suffer no damage from a hit.
This was a deciding factor in the first PBW game; I warped through with a carrier into a fleet of Combat Wombat's destroyers. They were all armed with small 40mm lasers, and my carrier had thick armor and shields...
The destroyers quickly vaporized my armored warship, but they were unable to do any damage to the carrier, despite scoring about a hundred hits. (~10 ships, firing every other turn, for 30-40 turns with good accuracy)
60 leaky shield points, armor with 60+ hp/kt, and the lasers dealing only 45-ish damage. Eventually my anti-missile interceptors nibbled his unshielded ships to death 4 points of damage at a time, and my Carrier lost only a single crew quarters due to an unlucky armor leak.
(This fun story is a good example of why larger mounts are useful in CBmod even though they reduce accuracy. Small guns for small targets, big guns for big targets)