You don't have to prevent player characters from wearing any form of protection, just point out potential consequences of doing so, in that particular jurisdiction.
exactly. Armour is a type of clothing, and as Shakespeare wrote, "The apparel oft proclaims the man", or as Mark Twain put it "Naked people have very little influence in society" - the same could be said of amoured people.
In general, you need clothes appropriate to the context. If you are dressed for a war zone, people will think that is just good sense. In a war zone.
Most of what PCs do is not combat. You want to buy and sell cargoes, influence officials, sneak into places by talking your way past guards, get served in restaurants, buy supplies, obtain medical care, check into hotels, follow people around without being seen, convince fellow scientists that the organism you have discovered is very dangerous, socialize at the pub to find out local rumours, hike over rough terrain, fit through a small window,for example. All of these things are made very much more difficult, or even impossible if you are in armour, mostly for social reasons, but sometimes legal reasons or because of size, endurance, weather and comfort.
Many social rolls, and other non-combat skills are just going to fail if you're in armour, and certain other tasks will get minuses too. Players do lots of different kinds of things, so the Referee really needs to decide on these things. Characters who use armour frequently will be aware of these issues, so it is good to warn in advance - "you won't fit in there if you have combat armour on", or "if you wear that armour to that party, everyone will think you are ridiculous, and you will become a social pariah, and you won't get them to do the the thing you want them to do" (you might warn the players with high soc characters, who would understand this, and not warn the low soc ones....)
Having the right armour on at the right time is really, really important for not being killed: this is part of the game - if you know that the ambuscade is imminent, since you reconned the enemy camp: now is the time to suck it up and put on that hot armour. Or you show up to the fancy party in battledress at just the nick of time, which is the right move, since you found out the baddies are planning to gun everyone down and you can save the day etc.
Likewise, have the right kinds of weapons for the occasion is important. They may search you going into a location and taking your gun along is a risk - but maybe this time that risk is exactly the risk you need to take. You might need to have a big gun with you sometimes, but on the other hand, not having a gun and seeming harmless or friendly is the right way to navigate a situation successfully.
Make the wrong decision, and you might be facing ACRs in your dinner jacket, or conversely eating shrimp canapes and trying to convince a CEO to back your project while wearing battledress.
Same goes for ammo choice. I assume that NPCs will often have different types of ammo available, mainly different AP levels, and that is just good sense, and it is what the PCs do. There are often concerns about over-penetration; in most situations there are delicate, important and expensive things you could break (on spaceships), or innocent bystanders you can hit. But if the enemy is wearing high-spec armour you need high AP, and if something breaks, it breaks. So you need, and have, both kinds, and might have to switch mags before shooting. This tends to level the playing field a bit. It also makes the players a lot less obsessed with wearing armour everywhere - since the advantage it confers can be nullified relatively cheaply, and often is.
Traveller has lots of different kinds of games that players can end up involved in. Part of the meta-game is understanding which game you are going into at a particular moment, and bringing the kit appropriate to that game.
