It's rather complicated. There are two mechanics that make the armor value prevent damage, soak and reduce. Soak just takes away a fixed chunk of the incoming damage, no matter how strong a hit is. So it's the main reason why peasant attacks or sweetspot fails glance against plate. Reduce, which comes after soak calculation-wise, on the other hand removes a percentage of the incoming damage and thus the stronger the attack the more is prevented by the reduce mechanic.
The 3 damage types now behave differently(set in the module.ini with parameters) when handling soak and reduce. Blunt damage gets a bonus for overcoming soak and should in theory suffer less from glances with weak attacks than the other types. Pierce gets a bonus against reduce and so strong attacks against heavy armor are weakened the least with this damage type(in theory). Cut sucks against both soak and reduce and is the worst type in terms of overcoming armor.
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Anyway, this concept doesn't really work well because one armor value isn't really enough to put a significant difference between blunt and pierce. I'd rather have more than one (local) armor value for an armor to describe how good cut/pierce/blunt performs against it. Ideally the piece of equipment would get seperate cut, pierce and blunt (c/p/b) defense values. With that I could make maille armor (60/35/25) strong against cut while weak against pierce and blunt. Padded armor (25/20/40) could perform well against blunt and plate (75/65/55) could be good against anything.
It could be done with giving an armor two new attributes, the pierce and blunt multipliers. A default value of 100 for both would mean no difference for handling the different damage types(for example40/40/40). 50 for pierce and 75 for blunt here would lead to (40/20/30). In the damage calc it would check what type the incoming damage is and take the related armor type multiplier from the armor. With that we could get rid off the global soak and blunt multipliers from the damage types that are used to set cut/pierce/blunt apart at the moment.