It's incredibly unclassic, but that is the system we have.
For any interested: the correct formula in velious is:
Raw AC (Hardcapped based on level) + Class Bonus + Defense Skill Bonus + Agility Bonus + Spell AC = Total Displayed AC (Hardcapped again based on Class)
Except, note: sometime during Velious it was changed to a soft cap for melee classes only. The return was fairly small, though.
As you say, shield should not be double counted, and the return after softcap is definitely not minimal.
Point of interest: rogues should get a small boost to mitigation AC for having moderate levels of agility. I don't know if that happens here.
(
Source on the above)
So, the reason the Devs knowingly use an in-classic system?
Apparently the mobs have been tuned on this server for bloated AC, so they end up doing approximately the correct dps at 50-60. IT was said somewhere (I don't have a link) that it would be too much work to retune all the mobs attack values to be balanced to worn AC values after worn AC gets nerfed.
Really we should not be releasing green until this is fixed as it is a huge, HUGE unclassic bug that comes up almost every time any npc hits a pc.
edit:
Also, this Haynar comment: "There is a component to your defense rating based on level." Seems to be something that should not be true. AFAIK the Defence skill is meant to be a loose proxy for level, level it self should never be called in to such equations.
doubleedit cos forummads:
Haynar did end up removing the level part from defence rating and installed a worn ac cap of level*6 + 25 at low levels.