Defecting, or being forced into Piracy, will not advance your story unless you are playing as Catalina or as Otto. If you want to only do things that raise your piracy fame and you are playing as Joao, Ernst, or Pietro then there is no need to defect to Piracy, just attack fleets.
Actually, Catalina's game will advance as long as her piracy fame increases and it can still do that even as a citizen of Spain. There are two battle events that take place early in the game in her story and if you go to Seville and try to enter the castle after those events you can defect to Spain at that point and play the entire game...to the very last event as a citizen of Spain. If you defect before those events (after leaving Seville the first time) then those events won't happen, and they should happen very soon after leaving Seville so it is only the first month that she can't be a citizen of Spain.
If you are playing as someone other than Catalina or Otto, and you want to be "Loyal to Piracy" then attack the fleets of the country that you are loyal to...just know that you may not be able to finish that story.
For example, I often have Pietro get his first rank as Loyal to Italy just to be able to enter castles. He can get that rank through ANY fame that you like, but anyway, I then defect him to Portugal and raise his piracy fame until it is higher than the other two fames. At that point I get a Letter of Marque, just because I can, and then finish the game as Loyal to Portugal. If instead you simply started attacking the fleets of Italy, then eventually Italy would reject you and you would be Loyal to Piracy.
I'm not sure, but does that answer your questions?
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