So much sense this makes not...
To compress a material as much as he did, the gaps have to take up more volume than the material itself, so it'd be very porous. Most solid materials aren't that compressible. But, eh, magic.
If the sword breaks when you hit the armour with it, it means the armour has a very strong blade-breaking enchantment on it. Otherwise that sword is just crap. A proper steel sword can take a hit with full force against an immovable object, although it will chip on the edge. But if there are significant enough imperfections or prior damage to it, it could break. Most likely it would break at the hilt, since the tang is the weakest part. But, eh, magic.
"It's like I'm not wearing any armour at all!"
Well, there's a reason for that. And it doesn't have to do with his cheat skill. But, eh, magic.