I appreciate the effort but I believe there was a misunderstanding. I'm not interested in knowing how armor rating is calculated (As there is lots of information and formulas already available on the UESP for that), what I'm interested in knowing is what's the cap. What I mean by that is the following:
Basic damage calculation: (Damage * Damage) / (Damage + Opponent Armor Rating)
The "Opponent Armor Rating" variable in the damage formula is capped. How do I know? Simply because I've done some tests where I've had ridiculous amounts of armor rating (For testing purposes) and damage was not lessened more than if I had a far smaller number. The issue I'm having is pin pointing the exact number where armor rating stops becoming more effective. In other words, the hard cap on armor rating.
In Oblivion it was simple, if I recall correctly, armor rating was capped @ 85 which meant 85% damage reduction. In Skyrim it's capped @ ~567 provide you're wearing all the appropriate armor pieces to obtain the hidden bonus. So what's the magic number for Morrowind?