The formula can be divided cleanly into two parts. The first part (100/(100+armour)) is essentially a percentage reduction, and a weak one at that. With 50 armour ( a decent amount to have by the late mid game), this is a 33% reduction. With 60 armour (close to being the best you can get), it's 37.5% reduction. These figures are very low when you compare them to other games. Early ID software games, for instance, had armour ranging from 50% to 80% protection, and even then, they didn't make you feel invulnerable.
The second part is integer damage reduction. This is the main thing that protects you from cut and pierce damage. However, for blunt damage it's completely absent! This means that no matter how much armour you've cheated onto your character, you'll never be fully protected from people flinging 3 damage pebbles.
This is the core reason why armour feels ineffectual. The damage reduction for attacks in general and blunt in particular is so low as to basically not be worth having heavy armour.
source:
https://forums.taleworlds.com/index...t-doesnt-work-and-how-to-make-it-work.426296/