Except it doesn't say you give up all attacks for one round. It says you simply defend yourself and move during the round. On your action you don't attack or perform any other activity other than moving your speed. AoO's don't happen on your action, they happen in response to other people's actions.
Total Defense is a Standard Action that you can take instead of the Standard Attack Action. Nowhere does it state that it prevents you from threatening an area, it just means you chose to focus on defense instead of offense for that round.
If someone opens themselve up to you (i.e. provokes an AoO), it doesn't prevent you from making a reflexive attack in response. The PHB doesn't address this issue at all.
When the Sage was asked, he pointed out that Total Defense doesn't prevent you from threatening an area, and advised that they be allowed, but with the same -4 pealty on your attack roll that Fighting Defensively would give.
You can choose not to take his advice, but it seems very reasonable to me, especially in light of the fact that the Total Defense manuever in the PHB doesn't address this issue at all. It also makes perfect sense to me, as someone who has done exactly this when fencing: gone for total defense and only attacking when my opponent makes a mistake that opens themselves up.