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The armor shred upgrade lets your weapon bypass that damage negation when you break the armor, so essentially lets your m1000 skip the 20% damage penalty. Otherwise if a shot breaks the armor its still gonna do 20% less.
As for the difference between 100% and 200%, is there even a weapon that grants 100% instead of 200%? Because my guess is that 200% implies it's twice as effective at breaking armour, meaning if 50 damage is reduced to 10 armour break damage on a Praetorian, you'll instead be doing 20 armour break damage (although these aren't real numbers, just an example).
It's hard to say exactly how much of an effect that has, but hopefully the future firing range will let us test different loadouts without having to load into a mission.