There are two forms of absorption used in SWAT: nanites absorption and power armor absorption.
Nanites absorption is the percent of damage that can be blocked using energy. Power armor absorption is a flat reduction in all incoming damage. Power Armor improves the later - it reduces 3.2 damage from every hit.

The damage taken formula is this:
[ Damage * (Nanites Absorption) * (Armor % reduction) ] - (power armor damage absorption)

Ex: [100 damage * 0.10 (Light lvl 1 nans) * (0.90 armor (~2 armor))] - (1.4 (light armor)) - (3.2 (power armor))
= 9 - 1.4 - 3.2
= 4.4

So, that 3.2 damage flat reduction is really good for small hits, like from zombies.

http://swatreborn.com/readmerebornarmor.html

All that said, I agree that the tooltip is pretty confusing and I will try and clarify this information with some improved tooltips. Thanks for bringing this to attention.

Thanks for the answer. And one moment. Reducing the speed penalty from armor does not work when absorbed but works when carried in a bag.

Yeah, you're correct in that regard. It was originally this way by design, as the Cyborg used to be able to both absorb a shield capacitor and carry one separately. However, now that the Cyborg cannot do both, it might be worth reconsidering this.