<p>The inter-shaft bearing exhibits two vibration modes under localized faults: paroxysmal shock vibration and continuous shock vibration. This study examines the amplitude modulation behavior of paroxysmal shock vibration induced by localized defects on the outer raceway of inter-shaft bearings. A dynamic model of inter-shaft bearings is developed by considering nonlinear rolling element–raceway contact, rolling element dimensions, and defect geometry. The effects of defect size, Hertzian contact coefficient, bearing contact stiffness, and bearing clearance on vibration response and bearing forces are systematically analyzed. Results show that vibration amplitude increases approximately linearly with defect span before stabilizing. A higher Hertzian contact coefficient suppresses shock vibration, while increased bearing stiffness enhances amplitude modulation. Bearing clearance affects vibration amplitude in a piecewise manner. The findings highlight the significant influence of inter-shaft bearing parameters and defect geometry on paroxysmal shock vibration, offering a theoretical basis for fault diagnosis and reliability design.</p>