Both kinds of screening function as described in the Commander’s Manual.
Defensive screening no longer requires that the ships be touching physically to activate. Instead a ship that is less than 1 hex away from another ship’s base is considered to be in contact. This can be determined with a Movement Aid as seen below.
The 2 Hex ship can defensively screen the 3 hex ship but not the 4 hex ship.
The 3 Hex ship is in base contact with the 4 hex ship so no measurement is needed.
As in the Commanders Manual, Offensive Screening is determined by line of sight.
Here the 2 Hex British ship on the right is Screening against the 3 Hex French ship on the left.
This will block shots against the 2 hex British ship from the 4 Hex French ship because it is in the line of sight ‘shadow’.