How does Spell Defense work?

I'm seeing two ways I can interpret the trigger description ("When you craft an ongoing spell into a makeshift shield of arcane energy to deflect an attack"):

1) You've cast invisibility, for instance on the Thief. Then a goblin is dealing damage, and you pull that spell energy into a shield, blocking 1 damage (invisibility is a level 1 spell) and ending the invisibility.

2) The other way I can see interpreting this is that you know the spell Invisibility, so you cast it as a makeshift shield that's ongoing. Later, you're attacked, so it blocks a damage and is ended.

I think the first interpretation is the correct one, though it seems a bit weird to me.

My players were doubly confused by this move, because there are only a few ongoing spells in the list and none of them are first level, if I recall. Invisibility is a funny example, too, because it's a common ongoing spell but if you're invisible then you're probably not being seen and attacked.

I think we houseruled it into "When you craft a spell into an ongoing shield..." This essentially made it into its own ongoing spell. The player marked off a spell of his choice from his list. While the shield was up, the character took -1ongoing to cast other spells; the shield was dissolved after it was hit.

Definitely could use clarification, our houserule was kinda clunky.

I think the first one is the correct one, it's not about you casting a new spell or having a specific spell around but more of you withdraw the energy you keep pulsing into a spell to shield you from a single attack. And even something like invisibility is not infalible, there's smell, hearing and try sliming (?) an invisible character, i don't think that a gelatinous cube cares much about what's on it's path.

Krokus: I figured that was correct. It just seems a bit weird. I could see an occasion where you'd want invisibility up (as it's the only ongoing 1st lvl spell), but you wouldn't actually want anyone to be invisible.

We've messed around with the Ongoing tag a little.  We've replaced anywhere that it says, in the text, anything about maintaining a spell and made Ongoing a tag with specific mechanical effects.  There's a lot more there to feed the Spell Defense move than there used to be.