The order of declarations decides whether or not it's defense, not any geopolitical situation.
You, as Bulgaria's ally, declared war on Turkey, they never declared war on you.
Thus, Germany declared war on you, for DOWing Turkey.
Thus, Bulgaria declares war on Germany, for DOWing you.
You can see how this goes. Note that since Turkey didn't DOW on you, England doesn't DOW them, just Germany. And although it doesn't say that the Turko-German alliance was canceled, that might be the case anyway, since Turkey didn't DOW on England for DOWing on Germany.
Indeed. Pretty straightforward, isn't it?

And yeah, IMO all defensive pacts should stay, and the Ottomans should have DOWed England too
Most of these war declarations are formal anyway, since the civs are far away from each other
EDIT: Sweden should have also declared war on England
We have two groups: Austria has defensive pact with Bulgaria and England, Germany is with Turkey and Sweden
The correct order should be:
Turkey on Bulgaria
Austria (DP with Bulgaria) on Turkey
Germany (DP with Turkey) on Austria
Bulgaria and England (DP with Austria) on Germany
Sweden (DP with Germany) on both Bulgaria and England, also Turkey (DP with Germany) on England
Austria (DP with Bulgaria and England) on Sweden
Basically everyone should be in war with everyone from the other group
The deals should either be cancelled on the very end of the turn, after everything happened, or should stay, and only formal cancelation is possible.
I prefer the second version
IMO it's more realistic this way, and more wars are good for the mod