Toughness grants extra stress boxes, so a character with 3 endurance (4 base physical boxes) and Inhuman Toughness (2 extra boxes? don't have my book on me) would have 6 physical stress boxes, and natural armor of 1. The way the character sheets are normally presented these extra stress boxes come in parenthesis. The Catch says that such attack completely bypass the toughness power. So, it seems pretty clear that if such a character was attacked by some means that satisfied his catch, he would not be able to use the 5th or 6th stress box (pretend they don't exist, they are in parenthesis for this reason), and the attack would bypass his armor.
So basically, lets say this character is a fae and has the standard iron catch, and is attacked with a steel sword with weapon: 3(this should satisfy the catch, as we see in the books). He rolls athletics of 3 to dodge, and the attacker gets 4 weapons. So he takes 4 stress (4-3=1, 1+3=4, note that this ignored his armor as well). This fills up his 4th stress box. If next round he were to take a 5 stress hit from the same enemy (say weapons 4 against his bad roll of athletics 2) then he would not be able to use his 5th stress box (since it came from toughness), and he would be forced to take a consequence (which his recovery powers would not be able to help him with).
About handling PC's with catch satisfying items. It is pretty clear from the books that when one is prepared for a fight against a supernatural enemy, they have a good chance of winning, even if they are just a mortal and are otherwise outmatched. I think Harry mentions this several times. This is also pretty much how it goes in the game. When you know beforehand that you are going to be fighting RCVs/BCVs and bring tons of holy water/blessed bullets/garlic, then you are in good shape (this is how the Black Court was mostly wiped out) and the fights will be fairly easy.
In many of my games (and in the Dresden files), the characters do not know what the enemy is until they see it for the first time. This makes it much more difficult to be prepared. Sometimes the murderer was a vampire, sometimes it was a troll, and you dont know before you get there (note that the catch of the fae is fairly trivial to satisfy for any character using Weapons to attack, as most weapons are made of steel, but most guns do not handle iron/steel ammunition well, ans will break if you try it).
If the characters are prepared, and the monsters are not, it will be easy and feel like a slaughter, and it should, because the PC's got the drop on them. But a lot of the time, especially with the Red Court, the enemy is prepared as well. A good challenge for PCs is a group of about equal number with about equal refresh spent. If the PCs are ALL toting the catch, dont count that refresh, upgrade the Lieutenants and Bosses to more strength/speed (the goons should probably still be fairly normal). Make it feel like "Ya, you were prepared for this, but they knew you were coming and called in the heavy hitters to defend themselves/fortified their position."
If the character did not know what was up, let them spend fate points/use undeclared enchanted item slots to declare they happen to have something to satisfy the catch, but only if it is cool or makes sense (if it is cool or fun, it does not have to make sense, since everyone will be happy with the awesomeness). If your guy with a gun says he just randomly happens to have blessed bullets (for no reason), don't let him. If he recently stopped at a church where his friend is the clued in priest, let him declare (for his fate point) that while he was there, he/the priest felt some inkling he would need these soon.
