Greetings,

If I read the rules correctly Brace only reduces the total damage. So, it should have no effect on any blue Crits that I have. Meaning unless there is an effect that specifically states "Choose a die to remove" as long as I have a Blue Crit at the resolve damage phase I can "exhaust all defenders defense tokens". Then activate squadrons (Buffed with Sloane effect) during that turn, and remove defense tokens from the game?

You are correct. Brace doesn't remove crit effects on it's own. There are other mechanics that can remove crits (Brunson, evade defense token, etc.)

One thing to keep in mind is that overload pulse crit effect takes place after the defender has a chance to use their defense tokens. So it will turn their remaining green defense tokens red, but have no effect on the already exhausted (red) tokens.

If you can follow up some squadron activations from another ship (or from the same ship if you happen to be running flight commander), you can indeed strip those tokens away.