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Well I am only level 15 and my gear is just the stuff a person gets for doing the quests up to that level. I have not one piece of rare armor or special drops. I got a couple high AC pieces from the Heavy Armor Vendor, but my mitigation in offensive stance is only like 11% according to the tool tip. I thought the same thing at first, but I have been seeing this trend 100% since I started. It seems like they just have a static damage (IE 100 damage for melee attack) and that is then reduced by whatever your mitigation is).
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Xerokill DreadFist - Lesser Giant Dread Knight (Hanseatica) - Thunderaxe
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