So it seems to me that attacks still either just ping off armour or are a OHKO in a lot of scenarios. IMO both are undesirable outcomes, but with the way armour works now (ie deducting a flat number from damage) makes it hard to strike a balance between the two. The problem is worsened by the fact that there's no armour penetration now, so most UA attacks will ping off armour, leading to boring decks that are mostly just Striking attack and defence cards.
What I propose instead is to make armour reduce a percentage of the damage, so all attacks do some damage. Raising percentages with quality would make for OP armour in late game, though, so I think that instead the quality ratio (capped at both ends) of the attacking weapon and the armour should be used (q10 for fists, use knuckles/gauntlets for better q). Additionally, I think that it'd add an interesting new dimension to attack cards if they had inherent armour penetration that would deduct from armour. So we could have low damage high penetration attacks for opponents who's armour outclasses your weapons, or high damage negative penetration attacks for hunting or quickly dealing with no-gear alts.
The only issue left is the base damage that's being reduced. With the weapon/armour q ratio in place I think adding damage for q is not needed. Strength should be the only multiplier (well, perception for archery), so hitting con equal to your str always does the same percentage of total HP worth of damage. Speaking of archery, I think it could work well with this system if damage scales by per / agi, and instead of attack cards inherent armour penetration is based on weapon and projectile type.
TL; DR
I want damage formula to be: base dmg * ((sqrt(str/10)) - (base ac * clamp(armor q / weapon q, 0.5, 2) / penetration))