Kath Scarlet gives the defender a stress token whenever her crits get canceled.
She cancels her own crits when dealing damage with an Ion Cannon.

Does this mean that she'd stress/Ionize an enemy hit with her Ion Cannon, or am I simply mis-remembering the exact wordings of the cards?

Kath only adds stress if the defender cancels the crit. If she (or the ion cannon) cancels it, no stress.

Pretty complete coverage here.