After digging through most of the damage calculation thread, Damage Calculation - #534 by Argon, I think the simple answer to this is that my math was wrong. I had previously only read the first few posts in that thread and have been using the ADR^1.35 formula ever since.

But it turns out that this formula is only a good approximation up to an attack:defense ratio of 4.0 or so. I got suspicious when my Kara seemed to be taking unreasonably large amounts of damage from strikers. Since these typically do 400-500% damage and my Kara wasn’t fully leveled, this put the attack:defense ratio above 5, which is exactly the point where the exponential formula starts to strongly diverge from reality. I then ran some tests on the dark lord, where the attack:defense ratio is even more ridiculous.

Bottom line? This is likely working as intended, though it’s impossible to know for sure since Small Giant chooses to be opaque about their damage calculations. Another key take away is that bonuses to defense aren’t as good as you’d expect. They help a lot against attacks with a lower attack strength (where you don’t really need the bonus) but are much less helpful against attacks with a higher attack strength (which is where you really need the bonus).