I have the original version of Ghost Ops (which uses Fudge dice), not the Savage Worlds version or the OSR version. This question is about that original version, but if you think the rules in one of the other versions can throw some light on this, please chip in. I’m hoping there is clarification for this question in one of the expansions, or in an updated version of the pdf (I only have a print copy). I’ve failed to find any errata on the internet.
On page 108 of the core rulebook, it says this about Armour:
If the Armour Level is less than the Penetration Level of the bullet then no armour is rolled as the bullet has ignored it. If the Penetration Level is less than the armour level then that amount of armour is ignored.
If a Penetration Level 3 bullet hits Armour 2, then no armour roll and the bullet does full damage.
If a Penetration Level 1 bullet hits Armour 2, then the armour becomes 2 -1 = 1. And then an armour roll is made to see how much the armour reduces the damage.
What happens when a Penetration Level 2 bullet hits Armour 2?