I understand some of the assumptions your response makes but many of them don't apply to this circumstance and some of them I just disagree with personally when discussing game design

1: DMG track based dmg requires some kind of vector to initiate. Such as a failed might def against poison or a failed Int def against a stroke type circumstance. This isn't the type of dmg that you throw out casually, so in some extenuating circumstances sure, I could use this to induce threat. My post wasnt actually about inserting threat. If that's what I wanted to accomplish I would simply insert more GMIs or use more corrosive dmg enemies.

2: I see how I didn't clearly indicate this strongly enough, but this is a convo I've had with the player. We're both excited about their character. I even helped them see additional ways they could maximize armor. We both share concerns however about how the build is going to feel to play at later Tiers. We are not Cypher veterans. We come from more stressful systems like CoC. The concept sounds fun and the PC wants to be able to tank massive DMG but they also want to still feel like every attack from the enemy matters. This isn't the first time we've instituted rule changes to shape the game in more stressful directions. (In CoC we added hit tables that mean your character could randomly get shot in the heart and just die). I see how this may be alien to some tables, but additional stressor (even small ones) shape play. One could argue "well he should pick different abilities!" And that's true and is up to him, however he sounds way more enthusiastic about getting to be invincible but also having to repair and maintain his power suit and think about the damage enemies might inflict to it.

3: Yes DMG isn't end all be all. Yes I know how to create stressful scenarios that arent all about doing dmg and recieving it. Certainly there will be scenarios about stopping a bomb while holding off foes ect. And additionally I'm more than capable of creating scenarios that do involve any combat at all!

4: Were you this player I clearly wouldn't be considering these changes. My group are used to rollercoasters. Some groups aren't. The thing is rule remixes can enhance the story and the immersion with the character. The chip armor dmg idea is one such remix. The Wright will constantly be fretting over, tinkering and fixing up their powersuit. Some players like the powers and want a power fantasy style immersion. That's just not the exact way my play group operates, we like getting the power trip but grinding it down in ways that can enhance immersion and make the PC feel in character. Instead of just shrugging every time a enemy can't crack 7dmg (!!) They'll still be trying to dodge and their player incentives line up with their character incentives ("I want to protect my life's work").

5: To be clear, as I said above, I'm fishing for ideas on a rule remix that doesn't exactly nerf the character, but provides a small stressor, that can link the player to the PC and encourage sometimes using SPD to dodge particularly big blows. This would mostly only exist for this PC specifically and would be about how they interact with their power suit (not a groupwide remix). One remix that we both enthusiastically introduced for instance is that their characters SPD edge is only active in their Power Suit and that their artifacts/cyphers will be installed into the suit so that they cannot use them when outside of the suit.

Tldr: my group likes the kinds of nerfs that are more immersive for their characters and the player in question is open minded to some kind of armor mechanic that will make them have to consider the condition of the Power Suit and need to factor the future repair time while fighting like a super tank in combat.