Hm... I guess third choice is decreasing armor, right ? then :
1. Choice - Instant Bonus Armor :
Sounds far logical. Taunt + armor bonus for beign in a defensive position and after the bonus time, assume a normal position (the "position" thing is just for explanation). It would be one of my choices.
2. Choice - Increasing Armor:
Ilogical, as I said. No point in beign hit and gaining armor...
3. Choice - Decreasing Armor:
Sounds even more logical as the first, as it's almost the same thing. The only difference is that beign hit would "decrease" the defensive position, and so decreasing armor. It would be my second choice.
Putting 1. and 3. front by front, I know 1. is better for gameplay, and I would pick it for beign stronger, but 3. is more realistic. It's up to you , I guess... or up to a poll
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