So the streamlined version would be:
To-hit=Agi+Weapon skill vs Rea (+dodge for full defense)
DV=Base DV+net hits above-AP-armor?
That makes armor VERY powerful, three to four times as powerful.
Under normal circumstances, armor 15-16 is good for -5DV rolling and -4DV buying. Add 2 each for Reaction and Body and you've pretty much sucked up the base damage from a burst as-is (call it -9DV). Change that from -9 to -20 and combat is going to get VERY long against weapons while remaining painfully short against spells. In fact, this would put spellcasting off by a large enough margin to make it unbalancing, even if Counterspelling is treated like armor. Remember that after the base DV is accounted for, something like 10% of the initial shooty dice pool will translate to increased damage.
This is why I said I would only even consider the optional rule IF you add in the other house rules I mentioned. Namely, get rid of all instances where armor adds up except for helmets and shields. Heck, turn shields into what they really are, a modifier to your Reaction roll, shields help avoid, not absorb, hits.
Now, the best armor in the game gives you 18/16, yeah, it's still massive, but it's Availability 20F, 30kĄ armor, it
should be beast to take him down. APDS in a Barrett Model 121 will still reduce that 18 to 10 and with DV 9P + Net hits, the punk in the armor will be hurting in the morning.
That being said, buying hits is still the more consistent, more elegant solution, though I'm starting to think "armor subtracts directly from damage" seems a bit more realistic, if not mechanics-friendly. After all, a guy in military grade heavy armor
should safely ignore anything short of anti-vehicle and high armor-penetration. DV - (Modified Armor Rating) reflects that better than DV - Hits.(Modified Armor Rating + Body). Does definitely make it a less lethal game, though.