The armor is one time consumable.
If you pick up new armor and you still have at least 1% or whatever minimal value is of previous one then it will regenerate.
Armor also scales with HP so dont take it unless you have high HP.
A very valuable asset to have armor even at the lowest HP.
Mine dropped at 2HP but with the armor I managed to make it into the next shop seciton where I got a chance to regain my health.