Edit the scripts. Replacing the assets directly can lead to more headaches. In this case if you replace the model you'll end up affecting all the Seraphim NPC's.
This controls the hitbox size (collision dimensions) of the itemtype in question. Larger numbers mean you can interact with it from farther away. Smaller numbers can result in clipping.
You will need to erase the armor's diffuse texture to full transparency and then add the SURFACE_FLAG_MASKED to the item's surface entry. This will render it invisible in-game. You may also need to remove the FLAG_EQUIPCUT from the armor's itemtype entry, in order to prevent the now-invisible item from removing the character's fallback equipment when equipped.