It's definitively going to be hard to balance because a lot of the concepts are barely explored in existing games. I think it would be easier to balance if DP does not serve as an HP buffer. I'm using this concept in my space shooter (shields = DP) and instead of having shield absorb damage fully, they mitigate damage based on the ship model and how much shield is left. That way, shields act in a different way which makes shield and armor complementary rather than another name for the same concept which prevents the "better equipment for all situations" scenario. Instead, it creates a "better equipment for specific situations" scenario.

Applied to your game : The guy with heavy armor would have more damage come through on all attacks vs one without, but once they are out of DP, the one with the armor is more resilient.

Numbers :

Heavy armor - Max DP : 50, absorb 8 damage
Light armor - Max DP : 100, absorb 2 damage

20 damage hit results
- Heavy armor 50DP -> 50% of the damage go through = 10 - 8 damage = 2 final damage (partially deflected blow)
- Light armor 100DP -> 0% of the damage go through = 0 final damage (miss-like)
- Heavy armor 0DP -> 100% of the damage go through = 20 - 8 damage = 12 final damage
- Light armor 0DP -> 100% of the damage go through = 20 - 2 damage = 18 final damage

The lightly armored guy relies on keeping its DP up to mitigate damage while the heavy armored guy does not rely on it so much. This means wearing a heavy armor allows him to use riskier attacks which deplete his own DP while the light armor guy can't use them because it would expose him to hard hitting attacks. He might instead choose to use light damaging attacks which boosts his DP.

Stamina could be a factor in the choice. Wielding a ten-pound sword is a spectacle of strength and stamina, especially when pounding on shields and making sudden directional shifts. Add fifty pounds of armor, and there's a fella who's going to get exhausted from sword play. In Mel Gibson's movie rendition of Hamlet ('sokay I guess) he battled with his adversary until they were both tired, but not bleading to death. They both had the skill and expertise to parry and dodge the threats, and offer dangerous situations to their opponant.

A fight that ended when they were too exhausted to go on, with the winner being the one who still had enough juice to keep it up, when the other man's strength failed him. Whether the winner lethally injures the loser could be a matter of character, issues that brought this situation, or deadliness of the 'game'. Like the swordplay of Qui-Gon Jin vs Darth Maul.