I suppose we could say that about Auroran and Knight of Order armor (although with the latter, I don't think that was even armor, but just their crystalline bodies) since those armors were never lootable. But the armors of the Aurorans and Mazken were lootable, weren't they? Once you banished them to the waters of Oblivion, you'd think if the armor was an extension of themself, their armor would go with them.
Then why don't their bodies fade away too?
The soul is the immaterial, dimensionless, transcendent essence of a thing. The things it forms around itself, the twisted creatia of its body and its equipment, is just so much extra junk, no more
them than your toothbrush is you. When they're banished to the waters, it is only their soul that moves. The things their soul has wrought from cretia are left to lie where they may.
[/speculation]