Transcendence is applying armour to physcial damage

I have a Militant Faith jewel socketed and Transcendence allocated. I have a Heartbound Loop + Summon Skeletons loop going when I have 0 armour from equipment. The loop stops if I equip an Astral Plate even though it shouldn't because the armour should not be applying to the hits from Hearbound Loop. I am not converting any physical damage taken to elemental damage.

How to reproduce
Equip Heartbound Loop and Militant Faith
Allocate Transcendence
Let a minion die and see how much damage you take.
Equip an armour item
Let a minion die and see that you are now taking less damage than before