While you are at build height limit, equipping armor is slightly bugged. I dont know if this is a bug or if it is intentional, but here it is:

Equipping armor is normal if you dont look at a block that is at the build height limit.

Equipping armor is broken when you try to equip it while facing a block that is at build height limit, as the game thinks you are trying to place armor instead of wearing it.

(In the screenshot attached, I tried to equip armor while facing the block, and it did not allow me to, as it thought I was trying to place it. I did it on Windows 10)