I always thought armour added to your maximum Endurance, and when you took it off/lost it, it reduced your maximum Endurance (while leaving your current Endurance alone).
I believe all of the names, places, etc are copyright. Rules were all done as OGL, so you could use the rules for the Kai lords, for instance, but would not be able to refer to them as such, nor the names of the Disciplines.
I'm a bit out of the loop myself, so not sure. I do know Gary Chalk and Jamie Wallis (of Greywood) are working on a new series of gamebooks, so that maybe taking up their time.
I'll give you another snippet of info. According to Gary the game was going to be published by Games Workshop initially (back in the 80s). I'm assuming the falling out Joe and Gary had with Steve Jackson and Ian Livingstone was the reason it wasn't :)
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