An old post explains in detail how armor prevents incoming damage. This has pretty much nothing to do with damage percentages. In fact, the amount of prevented damage is a sole factor of a few random variables and armor rating: this amount it then subtracted from the amount of damage received, which is also randomized a bit. However, module.ini says:
Who is right, the old post by cmpxchg8b or the creator of module.ini?# You can modify the damage system by editing the following values:
# The first three values determine the amount which will be directly subtracted from damage due to armor.
# The next three values determine the percentage reduction from the damage.
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