Obviously, the game would be broken if +100% armor could block all damage. Therefore, we can be certain that armor does not work that way. The question is: how does armor work? (And what is your proof?)
I think most people assume that 50% armor blocks 50% damage. If armor works like that, then 75% armor would block 75% of damage, and the game would break at 100% armor. This is a linear relationship between armor and damage reduction.
Any linear relationship could have problems. It might be that 50% armor blocks 25% damage. Then if someone has +200% armor, they can block 100% damage.
If the armor system is linear, then the game must have some limit on the amount of armor bonus that will benefit your ninjas. Most people say that 50% is the maximum bonus, and the Volcanic Pendant relic is nice evidence to support this argument. http://ninjawarz.wikia.com/wiki/Relics
If you believe there is a limit to armor bonus, what is your proof of the limit?
An alternative system to linear growth of armor protection is logarithmic growth of armor protection. In a linear system +50% is twice as strong as +25%, but in a logarithmic system +50% is not twice as strong as +25%. The devs can design the system so that even a player with over +9000% can still take damage.
That would also mean that there is an optimal level of armor bonus. Discovering that level would be difficult, however.
Finally, it’s possible that the armor system works in a completely different way than the two options I have offered.
How does armor work? What is your proof?