Solution
No, most likely your device is not defective. The NI 9205 is an isolated module(Channel-to-Earth Ground Isolation). As a result, the analog front end of the device is floating relative to the cDAQ chassis ground. Thus, per the getting started guide, you must always connect the COM pin of your NI 9205 to a ground reference.
From the NI 9205 Getting Started Guide, here is how you should connect the NI 9205 in each of the measurement modes:
