Well, I think I was saying the more damage your armor MISSES (i.e. gets through) the greater chance you are K.O.d and/or a device in your armor is K.O.'d.
In the official rules version, Armor acts a bit like a Sidekick who jumps in the way to protect you from a bullet.
Not only is he definitely wounded, but he has a chance of being disabled in some fashion. I can see that; I think it is valid view of what could happen when hi-tech armor is hit, but then the PC wearing armor is always going: "I got hit! Now let's see if -
1) My armor protects me
2) my armor does not protect me
If my armor does not protect me, I am either going to be knocked out or incapacitated, since I am a regular Joe in powered armor. I only have 15 hit points. Good, but not good enough for a 20 point power blast.
If my armor protects me, then
1) It will lose protective value automatically. My next opponent will get a +20% chance to harm me.
2) There is a 1 in 5 chance one of my devices go out. I hope its not anything I use offensively in battle. Or defensively for that matter.
3) I have to spend $$ to repair it. Time will not heal this puppy.
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Man, I sure hope my armor survives this battle.
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Personally, I gave all Armor an SSR to at least ameliorate this problem.