When there is any pick of any damage inside the 2x2 crafting grid, the armor slots turn dark and lose their labels when your mouse is off of the damaged pick. When you put your cursor on the slots, it will highlight the one you're hovering over, and all below it will become normal.

How to recreate:
1. Go into survival mode
2. Damage any pick
3. Place damaged pick inside of 2x2 crafting grid

EDIT: Someone else checked and all damaged tools give the same effect. Credit to: Daniel "Glampkoo".