How does threaten work?

I can say that is not true, because otherwise my damage wouldnt spike so much at chaos vellum.

I believe I was doing 3 mils, then when I threatened I started doing 9-10 mils.

it could, depending on when it's applicable. if it's at the beginning (300-50=250) then yea, it won't, but if it were after your PDR was calculated it'd be a different story. say you had 85% PDR. 300*.15=45% left, -50%=0% defense. in this example, your damage almost doubles.