Also percentage armor makes no sense unless it's only against specific damage types or something since you could just multiply the HP by the inverse. E.g. Earth 2160 had three different armor percentages for ballistic, energy and chemical damage, each of which had different properties: All armor has at least a basic defense against ballistic, energy was additionally stopped by shields and chemical weapons were usually pretty awkward to use (on tanks that amounted to acid or flame throwers, fairly short ranged, though the alpha aliens had the obligatory acid spit and the ED used chem-based AA missiles). However just saying "this unit takes 30% less damage" doesn't really add to the game. Armored Core 5 has damage type based defense stats, as with all Japanese stats these are non-linear (I think any attack with damage < defense would get a massive percentage reduction in addition to the armor's general reduction).
Blanket percentage armor usually only appears as an upgrade.
So I think we've reached agreement that armor has to be subtractive. Well, unless we want some crazy scheme like in Arena Wars (1 and Reloaded, not 2) where each unit has two types of HP and will only die when both are depleted.
Still, the high cap units are kinda weak. One part of that is that e.g. ultra-heavies have insane HP so that units without a bonus against them are ineffective while high cap units may be easier to kill with a multiplier but will still die fast enough without one. This game is kinda skewed towards high HP with its unavoidable attacks.
To bring up real life again, real weapons are almost always instakills if they hit and penetrate. Even a battleship or carrier can be disabled by a single hit from a heavy anti-ship weapon (see the sinking of the Bismarck) which is why we don't build anything bigger than frigates and treat carriers as extremely vulnerable. Surviving a real life attack involves one of 1. preventing the attack in the first place, 2. hiding, 3. evading, 4. intercepting the shot or 5. absorbing it with armor with the last one only available if the attack is underpowered. Most aircraft, ship or building-mounted weapons are strong enough to ignore any feasible level of armor and units like planes and infantry are practically unarmored. This makes swarmers OP in real life (consider the general who, during a wargame, fielded tons of paddle boats and sunk the entire US fleet) and hidden weapon emplacements are extremely dangerous (e.g. several British ships were disabled by a single anti-ship missile hit during the Falklands war). Since devastating weapons don't need to be installed on superheavy units there's a definite skew towards lighter, faster units (and superheavies are so vulnerable that they aren't worth building, estimates are that the allied air forces would have wrecked the P-1000 even if it didn't suffer mechanical breakdown because air dropped bombs are just damn powerful).
AI War does not have such powerful weapons that aren't mounted on superweapons themselves so it's already skewed far in favor of heavies.
