You can create a Defect from scratch, or from an existing Issue. The Issue must be in the Create, Assign, Active, or Review state. If the Issue is closed, you cannot raise a Defect against it. Issues are used as an external method for reporting problems in Products or Parts. "External" could be a customer, development partner, or supplier, or depending on your organization's structure, someone from another division. If the people who evaluate the Issue decide that the problem is an actual defect (and not a user error or a suggestion for a new feature), they can create a Defect to resolve the problem based on that Issue. The Defect then shows up on the Issue's Resolved By category page. When you create a defect from an Issue, Defect Management copies these details from the Issue to the Defect:
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