AC's benefits are reduced when they exceed the softcap. Different classes have different softcaps. For example, a warrior may receive full benefits of AC up to 1400, where a wizard may only receieve full benefits up to 800.
* These numbers are only used for examples.
Once you have gone over the cap, return per AC is reduced, so using the above numbers for example, if a warrior has 1500 AC, it may only act as though he has 1425. So by increasing his "return of AC of cap" may make that 1425 seem as 1450.
Great, I've confused myself. If anyone can clarify this a bit more, it would be appreciated.