Quote Originally Posted by Didz View Post

I chose to protect my protectorate and instantly sufferred a dishonoured alliance penalty with the entire world including Bavaria who I opted to protect. Bavaria immediately became Hostile, even though I was defending them, and its cost me over 10,000 in state gifts to get them back to Friendly.

Somehow this doesn't make a lot of sense.
Well, you should have added time dimension (in your description) to those state gifts. All levels of gifts still give only +100 to relationship. But that's max. Giving another 2,500 gift the very next turn will just boost the "state gift relationship factor" from its decayed value of 98 to 100. So, you'd just have bought +2 to the relationship for 2,500.

Giving more state gifts only makes sense when the "gift factor" has significantly decayed.