Is there a way to increase the armor absorption cap past 100%?
Even if you could remove the hardcap, it would not function other than how it would now. Even before there was no hardcap, absorption values over 100% were no more efficient than those at 100%.
But they’d stay above 100% when getting reduced 
Probably only (if at all) if you increase the global resistance cap (found in gameengine.dbr).