Armor does decay now. The hit location is determined when you are attacked and the damage is assigned to that area/ armor part. Armor decay per piece is at a decent rate so it takes a while to see the item change from pristine to excellent. IMO weapon decay is too fast. Kill a couple of animals and skin them and you weapon drops by one category. With the amount of effort it takes to grind up, scavenge parts and assemble them the rate seems way too fast.