The skill should not grant AC bonus until the character enters parry mode, otherwise it is working like tumble, and feels imba IMO. And I do have a character with both skills.
Parry mode is a somewhat broken ability in NWN
Parry allows the character to block incoming attacks and make spectacular counterattacks.
* Ability: dexterity
* Classes: barbarian, bard, blackguard, champion of Torm, cleric, druid, fighter, monk, paladin, ranger, red dragon disciple, rogue
* Cross-Class: yes
* Requires Training: no
* Check: The difficulty class is the modified attack roll of the incoming blow. A successful parry means that the attack does not damage the parrying character. A character may only parry a number of attacks per round equal to the number of attacks per round available to the character.
* Special: Wearing armor may incur a penalty to the roll. If the parry is successful and the difference between the roll and the DC is ten points or greater, a counterattack occurs. A counterattack is a free attack made by the parrying character, at his full attack bonus, against the parried opponent.
* Use: Select the parry mode. The character will remain in parry mode until the mode is exited.
Notes
* Parry is a combat mode, so cannot be used at the same time as other combat modes.
* This skill was reduced from its original (pre-release) state and is considerably less effective than it may sound. Parry can only deflect the first attack in each of the three flurries in a round (for example, parrying an opponent with 5 attacks per round will only attempt to block the first, third, and fifth attacks).
* Riposte attacks are made with the character's normal (descending) attack bonus, not at full bonus each time. Thus if a character has an attack schedule of +16/+11/+6 and successfully ripostes two attacks, the riposte attacks will be at +16 then +11, not at +16 each time.
So to elaborate, attacks come in 3 flurries. If you have six attacks per round, your round would look like:
Flurry 1: Attack 1, 2 Flurry 2: Attack 3, 4 Flurry 3: Attack 5, 6
Ten attacks per round would look like:
Flurry 1: Attack 1, 2, 3, 4 Flurry 2: Attack 5, 6, 7 Flurry 3: Attack 8, 9, 10
Parry will interact with that table for determining which of your attacks for the round are used to attempt a riposte against an incoming attack.
Using the above, a character with 6 attacks per round will attempt to parry incoming attacks 1, 3, and 5, which have a better chance of landing against your AC than the scenario of having 10 attacks per round in Parry mode (you would try to parry attacks 1, 5, and 8, which have significantly lower chances of hitting your AC). So, a higher number of attacks per round would increase the chances of a successful Riposte attack (since the modified incoming attack roll is guaranteed to be less). However, having less attacks per round means you are probably going to deflect more incoming attacks (assuming the parry score is far higher than the character's AC).
If a character is surrounded, due to ripostes they cannot keep attacking one target so it causes the circle kick phenomena where a fight takes 2-3 times longer to finish since each of the surrounding enemies is damaged in turn (in the end having them all near death before finally killing them) which also means they can keep hitting you. And the enemies who are not parried can attack the character with impunity.
So to sum that up, Expertise is far superior to Parry mode, and both cannot be used simultaneously. Also granting extra AC in parry mode works somewhat counter-actively to it as a character benefits from low AC (attacks must hit to be parried) while in parry mode.
I find the recent implementation of Parry as 'passive AC skill' working fine as it makes finesse characters with higher skill point gain and whose theme does not favor a shield more competitive in gameplay.