I don't know where to begin with this.

The idea is to have a constant effect on my armor, where if the mobs touch/hit me, they get paralyzed.

Hard to do without OBSE, here is my idea:
Instead of having the script on the enchantment of the armor, consider placing the script on the armor itself. Magic effect scripts don't run well on constant effect enchantments.

The script on the armor would look like this

scn armorScriptBegin OnEquip PlayerSetEventHandler "OnHit" myFunctionScript ref::PlayerRefEndBegin OnUnequip PlayerRemoveEventHandler "OnHit" myFunctionScript ref::PlayerRefEndBegin OnDrop PlayerRemoveEventHandler "OnHit" myFunctionScript ref::PlayerRefEnd

myFunctionScript can be called however you like, it has to be an object-type script that will be called whenever someone hits you, the PlayerRef
Paralyzing them could be tricky, you need some way to control how long they remain paralyzed. Consider using a token (myToken), a non playable piece of clothing with no attributes like weight, cost, etc with a script for that.

scn myFunctionScriptref targetref attackerBegin Function{target, attacker}attacker.AddItemNS myToken 1End

And the script on the token would be like:

scn myTokenScriptref selffloat timerBegin GameModeIf self != GetContainerLet self := GetContainerReturnElseIf timer == 0let timer := 0.1self.ModAVMod Paralysis max 1EndIfIf timer < 3    ;change 3 to the amount of time you want them paralyzedlet timer += GetSecondsPassedelseself.ModAVMod Paralysis max -1RemoveMeEndIfEnd

I almost forgot about this. Thanks for taking the time to post that. I'll be trying it out.