I still do not have fallout new Vegas but I will be getting it soon.

My question is how does the whole faction React towards you wearing armor that is towards the faction that you are in and vice versa.

I have looked online about and still seems unclear to me, and most importantly it seems as if this aspect of F:NV limits the amount of armor that you can wear

Thank you for your help (if I get any)

If you are wearing NCR armour and you come across Legion and they notice you they will attack you and vice versa. Same goes for any faction. If you have on their enemies armour/outfit they will attack but the good thing is its only if they notice you. If you are enemies with them and you wear their armour/outfit and don't get to close to anyone you have a chance of getting into their areas.

Don't know about anyone else but if one person notices you in the wrong armor then everyone in the game world knows. I just tried on some faction armor with nobody around and then put back on my non-faction armor. I had to reload a past save because everyone hated me. Its better to wear non-faction armor.

Or only wear faction armor of the faction that you have 100% decided to support for a given playthrough... or if you're gonna run independent, just wear whatever you like.

You should also note that wearing faction armour will prevent you from being recognized as you should be within that faction. For example, if you are Liked or even Vilified by the NCR and you wear faction armour, you will become Neutral with the NCR so long as you are wearing faction armour. That doesn't mean that the NCR won't attack you if they catch you wearing Legion armour though.

I had one incident where i was 100% accepted by NCR and in the middle of an NCR camp.

I put on a legion garb and they all pulled out their guns and shot me.

Thats because you put on their enemies armor, and so in turn thinking you are an enemy they try and kill you.
Same if you are in the Legion Camp with 100% acceptance and you put on an NCR Armor they will attack you.