Straight from Stratics:
"A weapon with Hit Lower Defense will have a percentage chance on each hit to lower the defensive capabilities of the target for a short time. The amount defense is lowered is equal to a Defense Chance Increase of -25. The effect lasts for about 5-10 seconds and is not cumulative."
From UO.com:
"A successful hit with this weapon lowers the defense rating of the target by 25% for 8 seconds against all attackers. There is no cap on HLD. HLD percentages are multiplied rather than added - for example, if you have two items, one with a 30% chance and one with a 50% chance, then that�s a 65% chance that the effect will fire on any given hit. The effect does not stack with itself, although additional effects will reset the duration."
So it doesn't stack, but each time you are hit with it, the timer resets. You can see that the UO.com explanation has an error in it. The percentages are not multiplied. You actually have the equivalent of 2 checks. In their example, the first check is for 30%. The second check is 50% of the remaining 70% (35% chance). So the 30% plus the 35% gives you a 65% chance.