Ac is 'how is your protection against hits'
you cant have less than no protection, so Ac should never be lowered by corroded armour
your explanation could be a nice argument to make you have some vulnerability for physical/weaponmagic damage...
negative magic on items reduce players overall ac
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Good AC lowers the probability of you getting hit in the first place, a dodge of some sort so to speak. So if you have really poor clothing it might infact prevent you from being so good at evading attacks, or it's magical 'negative' bonus would simply 'magically' (I like the word 
) lower your chances.
) lower your chances.