Black Lightning is targetting Cloak who already has 1 token.

He targets with an Incapacitate attack, rolling a Critical hit.

Now, it is my understanding that the Incapacitate will push the character immediately before the Protected can be claimed.

Now the Critical creates a click of damage that the other player is trying to "Protect" out of.

So my question would be...

Does the Incapacitate token appear first, therefore pushing Cloak before he can protect out of the 1 click of Critical Hit Damage?

"Back in the day" before feat cards created a multitude of timing questions, tokens were typically placed when the Incap attack was made or when the second action was completed. It really didn't matter because nothing else was going on in the chain of events that mattered. However, the ruling has come down that tokens from pushing, Incap, or getting hit by the lamppost are placed at the end of the action.

In the example above, Cloak would be dealt 1 damage, and Protected may be used to stop that if the controlling player desires. Then Cloak would have a token placed on him, and push damage would be taken at the end of the action.

So the Critical Hit screwed me in this case. The one damage caused by the Crit can now be protected out of.

I believe they should FAQ the Protected Token to come after the push damage, since it is in effect pushing as well.

It doesn't really matter in this case, since Cloak will be taking one for using Protected anyway. You actually recieved the better end of the deal by gaining the 8pts & opening a shot that doesn't need to worry about Protected. You're opponent just made a mistake in using it on one click of damage.

Though, truth be told, that's the easiest way I deal with Protected. Hit for one each time then hit big when they're either pushed or have used Protected.

Stunning Blow is the only time I think this would matter.

That's incorrect. Damage dealt from an attack happens first, then token are placed for Incap, and if that token thus pushes a character, they take damage from the push last.

So by using Protected, you only take 1 damage, instead of 2.

In addition, you may want to stop 1 damage from being dealt as in the original case of a crit hit. Crit hits (double sixes) may result in additional Knockback damage.