Thank you so much! I'm happy that you had a great session. As in every rpg game I would say that rules which are not explicitely specified are up to the GM's (or in this case: the player's) interpretation. But here's how I would play it:
1. Staff of Enlightenment has no effect on the Mutator (and even if it had - the goal is to rip the scroll from the dead flesh...)
2. In my playthroughs I always used the weapons and armor I took from dead enemies. That maybe should have been expressed more clearly in the rules.
3. I always applied armor when A Chance succeded (having an advantage doesn't let armor vanish) but in the end it's up to your play style (and how diffcult you want the game to be).
Thanks so much for your interest in the game!