The Crystal Tardigrade's ability to manipulate energy levels is not limited to the realm of energy flow, but affects the entire space like a ripple.
As other objects approach the tardigrade, they will seamlessly transition from high to low energy levels, much like water falling from a waterfall continuously losing potential energy.
The water doesn't change, but the hidden potential energy within it is reduced.
It is as if a candle's image is being projected through a precise pinhole; as the distance closes, the pinhole image shrinks, but the information contained within the image remains unchanged.
If the content of the image is a person who can only think linearly, then they would not realize their body was shrinking.
According to the theory that the universe and everything within it is composed of Actual Energy, in a sense, both humans and armor are "3D images" drawn by Actual Energy in the universe.