1, the demon is wearing armor but not on their body. Deciding that their extremities are of need of armor but not their core is a pretty half assed worldbuilding excuse to make a hot demon character who shows off her boobs even though it’s unlikely to be practical for combat

With respect to number 2 I assume they’re talking about the detail added to the top of the breastplate to imply the boobs, and the sculpted shape where you can see the boobs separately, not the fact that there’s enough room for boobs. And sculpted boob shaped breastplates are generally not super effective as you want a shape that swords or other weapons glance off of, unlike concavities between the breasts which would guide weapons to a point where force could be concentrated.

3, I assume that’s mostly so it can fit in the composition, or is easier to draw without overlapping the raised arms, but yeah it’s a bit odd

I think it’s perfectly fine to like fantasy stuff with loose world-building and costume design based on whatever is cool or fun or hot, but it’s just as valid for folks like the person who made this to want costume design that’s grounded and doesn’t exclusively sexualize every female character