All armor should have two ratings: one for its ability to deflect, the other for its ability to absorb. The first, deflection, is mostly important against cutting weapons and to some degree against piercing, where it stops all cutting damage below some threshold, stops piercing damage below some lower threshold, and reduces damage from both cutting and piercing weapons by some percentage rate. The second rating, absorption, is important against blunt weapons, and again stops all blunt damage below its threshold, and reduces blunt and piercing damage by some percentage. Piercing attacks that exceed the threshold would be affected by both armor types, and therefore deal reduced damage (as in half) ABOVE the thresholds, so while it would excel at doing SOME damage in almost any situation, it would potentially do less total damage, particularly against lightly armored targets. A cutting sword is likely to slide across the armor without doing damage, unless it hits with sufficient force to cut the armor, in which case it inflicts serious injury by slicing skin and muscle. A thrown rock is still going to bounce off of a suit of thick plate armor, unless thrown by someone with a lot of strength (using bigger rocks), in which case it dents and crushes the armor into the skin and muscle beneath. An arrow or spear point is more likely than a rock to pierce a suit of armor, but deals further injury only in a single narrow point.
Fighting lightly armored or unarmored bandits and peasants? Use cutting weapons like sabers and rapiers to inflict maximum damage above the low or absent threshold. Fighting heavily armored knights with your strong companions? Switch to maces and hammers, because those sabers won't have nearly as much effect. Spears, short swords, and arrows would be reasonably effective in the hands of the regular troops for damaging heavily armored targets as well as bandits, but not for killing quickly.
There should be a lot more to choosing a suit of armor than just a larger single protection rating. As I noted, having two different effects gives some reason to use different tools and tactics, and having a percentage of coverage (along with less weight for pieces not covering fully) would depict things like open-faced helmets, armored cuirasses without pauldrons, or other "partial armor" situations. As it stands, all armor covers 100% of the upper body (except the head), and the helmet and greaves/boots/smelly socks cover 100% of their respective locations. Real armor COULD cover close to 100% (aside from eye slits), but was too unwieldy, heavy, and expensive for most troops to use. A small reduction in movement speed for higher encumbrance should make lightly armored skirmishers viable, so they can run and maintain their range from heavily armored troops. In M&B, Nord foot troops (and Sea Raiders) with heavy chain mail typically outpaced light troops, and could almost keep up with the slower breeds of horses, which is just silly.
It's undoubtedly too late to change this for Bannerlord, but the ideas for a more realistic and complex armor system should be debated well BEFORE the next installment in the series. Note that "complexity" under the hood can be used to make things more realistic and intuitive, as opposed to being more "complicated" for the player and LESS intuitive, which in my opinion is the worst of both worlds (reality and fantasy). Things that behave as you expect that they would in reality can be "fun", where things that behave other than how one expects (without some reason behind that behavior) often seem unrealistic and just plain stupid. The one exception is "magic", where one obviously does not want it to behave "realistically", but it is not included in the M&B games.
"Fun > Realism" is inaccurate; more like "Realism - Tedium = Fun". Adding in things like bathroom breaks is just "tedium", and does not make "realism" enjoyable. People call for things like dismemberment as an example of "Fun > Realism", yet shooting a bandit with a BB gun in Bethesda's Fallout 3 and having body parts fly off was not "realism" in the least, was so stupid that it ceased to be "funny" after the first time it happened, then became annoyingly immersion-breaking every time it happened from there on. Adding the little nuances that make things behave rationally adds to enjoyment, in my opinion.