Displayed AC is a number that represents both mitigation and avoidance.
I am assuming the reason the number goes down when you are overweight is due to reduced avoidance.
Generally almost no armor is worth going over the limit.
Weapons, Fungi, and Tinkerer Bags are pretty much always going to be "worth" their weight. Same for resist gear for raids. Other than that with everything else equipped I would stay under the limit.
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