Actually, it's not quite working out the way you proposed. It's half true.
I tested several shields. The person hitting them used a wakizashi, had 4 PS, 73 wpf. I had 5 shield skill.
According to the "damage-armor/hps" model, we should be able to calculate how many hits it takes to break a shield. I did a test in game and compared it to the number of hits it should take to break several shields. I have the calculated hits (based on our formula) vs the actual hits it took to break them:
MW Kite Shield- Calculated hits: 38.42 Actual hits: 36
Heavy Round Shield- Calculated hits: 26.84 Actual hits: 23
Knightly Heater Shield- Calculated hits: infinity (negated) Actual hits: 29
Knightly Kite Shield- Calculated hits: infinity Actual hits: 42
So for the most part, armor behaves by negating the damage caused to it, as predicted. (as seen in the Kite and Round shields...behaved as predicted!).
However, if the armor on the shield is higher than the damage caused, it does NOT negate all the damage. The armor bust be behaving differently here. I wonder how?
(note: there is bound to be some randomness to the damage caused, the distance the attacker is to the shield, etc. This preliminary test gives us an idea though.)