How to interpret the PMBus response delay time value?
Looking at the PMBus 1.1 spec: to understand what to do with the delay time bits for a given fault, you need to look at the corresponding fault response data byte for the particular fault you care about.


IOUT_OC_FAULT_RESPONSE
VOUT_OV_FAULT_RESPONSE
VOUT_UV_FAULT_RESPONSE
IOUT_OC_LV_FAULT_RESPONSE


...etc.

Bits 7 and 6 (Response) define what happens: continue without interruption; operate for delay time then follow the retry setting; shut down immediately then follow the retry setting; shut down immediately and stay off until the fault is clear.

Bits 5 to 3 (Retry Setting) control restarts: 000 => don't restart, 111 => restart continuously, 001 to 110 => restart 1 to 6 times

Bits 2 to 0 (Delay Time) - what they do depend on what is commanded by the other bits.

I would argue that your illustration #2 is the correct one. As for whether or not they are all part of the same 'event', well, I don't think there is a command to read back the current retry counter. You'll know when the event(s) are over when the count is exceeded (assuming it's not set to perpetual) as the warning states should become fault states at that instant.

You'll need to implement some sort of timer and decide for yourself how long a period of non-fault, non-warning operation is needed to consider the fault cleared. It could be hundreds of milliseconds or several seconds. You'll then need to define this value in your PMBus documentation.

I am not aware of a PMBus command that could be used to query or control this timeout value - based on the products that I have been involved with, there is no standard command for this. Some developers have implemented manufacturer-specific commands (i.e. MFR_RETRY_DELAY) to provide this functionality.