Armor doesn't fall off on its own. It's only less efficient when stacked because at some point building health is better due to health and armor being multiplicative, while each stat alone is additive.
Effective HP calculation is extremely easy to do in your head. Every 1 armor is a 1% increase to your effective HP. 100 armor means you can absorb exactly double the physical damage (ignoring armor penetration/reduction), 200 armor is triple, etc.
So if you ever find yourself stuck deciding between a Chain Vest and Giant's Belt, just check your current armor and hp values. If (crud, I forgot the armor value on Chain Vest. 40?) 40% of your max health is larger than 400 * ((armor/100) + 1), then take Chain Vest. If not, take Giant's Belt, and have more effective health on your way to Deadman's Plate than if you'd picked the other one.
Put it this way. If you have 2000 max health and 100 armor, buying Chain Vest or Giant's Belt grants you exactly the same EHP. If this is the case, go with armor, because that also increases effective healing/shielding/regeneration.
https://i.imgur.com/1HvNiEO.png?noredirect