PHB pg 110, bottom right (under Area Protected) gives an example of multiple psionics selecting complementary defense modes before beginning combat.Psionic Combat
The procedure is as follows: Combatants select their defense modes, attack modes, and opponent (if multiple creatures per side are involved). This information is recorded, and the defenses and attacks are matrixed to determine results.
DMG pg 79, top left:
Psionic Combat Notes
b.) Psionically-attacked creatures will automatically throw up a defense if they can do so, and will use the best type (most applicable) they can.
It appears to me that PCs & NPCs are to select their defense mode, while creatures' defense modes operate automatically.
Either that, or you can select mode if the combat is anticipated, but the auto-select takes over if the attack is unexpected.