If you have 50 of something, buy 100, and then buy another, you are not experiencing diminishing returns, even if the second instance is +200%, and the third instance is only +66%.
This is in reference to gaining 1% EHP for every point of armor. You are multiplying your health by your armor. At certain thresholds HP becomes more efficient than armor, but there are still no diminishing returns, simply one being more mathematically efficient than the other within certain ranges.
You're talking about a percent value that cannot scale above 100%. capped % returns do not have diminishing returns unless you can flat out obtain % as a base unit of measure and there is something that specifically supplies the diminishing returns (being multiplicative does not), which you cannot in League. They are a unit of representation.
Diminishing returns is when you obtain less of a value for every instance of that value. You do not gain less armor. You do not gain less EHP. Its a 100% hard cap representing the influence of that value that makes it appear as if you're getting less reduction, but you are forgetting that you are not purchasing % reduction. You are purchasing a flat 1% increase in HP vs that damage type for every point of that mitigation stat.
Even though 1000 damage would be mitigated to 500 at 100 armor, and then only 333 at 200 armor, that does not mean you are experiencing diminishing returns because the purpose of armor **is not a flat reduction to damage. ** Its a flat increase (1% of your HP) to your HP vs that damage type for each point purchased.
If you took 50% damage (500) from that 1000 due to obtaining 100 total armor, then bought another 100 armor, you are not experiencing diminishing returns. You are simply adding +100% to your total health vs that damage type (EHP), which brings the damage to 333. 100% (base)+100%+100%. Yes, you get x2 for purchasing the first 100 and only 50% increase for purchasing the second 100, but that's because your % values are getting larger while you are still purchasing flat values. 1+1+1+1+1. 100%, 50%, 33%, 25%, 20%. You are not gaining less. You are not getting less value. You are only seeing scaling while your base 'gain' does not increase by a % with what you already have. You wouldn't say you're experiencing diminishing returns because you aren't gaining +100% for each instance of that '1+1+1+1+1', would you? It doesn't have to be 1+2+3+6+12 in order to avoid diminishing returns because you aren't buying a % increase. You're buying a flat increase.
You gain a flat +100% EHP for every 100 armor; this does not mean you are doubling your EHP every time you buy 100 armor it means you are adding +100% to the total % you had prior (100%(base)+100%+100% is 300%...its not diminishing just because it doesn't achieve 400% [doubling twice]). Since health is multiplied by armor, at some points you are better off buying health rather than armor, but you still do not experience diminishing returns.
They are multiplying into each other; you are not gaining less value out of them, **you are simply seeing the effects of scale. **
Diminishing returns is specifically when you get less of something for every instance of it. You do not get less out of armor when you buy more of it, otherwise % armor reductions would absolutely fuck tanks on a level that we don't even see now.
Do the math and tell me that 50% reduction of somebody's 500 armor means they have less effect than the 250 remaining and I'll believe that there's diminishing returns.
If you can't prove that, then that should be a great example of how you're just seeing scaling values, which does cause your base unit to become 'insignificant' after a point, relative to what you already have, but you are still not experiencing diminishing returns.
+100% isn't a drastic increase if you already have 500%, but it seems huge if you only have 30% as a base; its all relative. You're mistaking that for diminishing returns due to a hard-capped 'imaginary' value representing the overall effect of additive increases.
TL;DR: You're using the wrong value to represent what you're actually purchasing.