Ugh, had to post on this because it really bothers me lol. It is not a wording thing. Diminishing return literally means the value you get from something decreases when you have more of it. If you get more movement speed, the amount you actually get from it goes down because of the softcap.
The value of the armor does not go down. IT IS NOT A DIMINISHING RETURN. The value of health increases as you have more armor. That is much different than the actual value of the armor decreasing.
The amount less damage you take, per point of armor, DOES suffer from diminishing returns.
However, the effective hp it grants still goes up equally fast.
IE, two champions, both with 2000 health.
ChampA has 50 armor.
ChampB has 250 armor.
If they both buy 10 armor, ChampA will see a larger change in how much less damage he takes. HOWEVER, because ChampB is already seeing a lower amount, his smaller improvement will still net him the same +200 eHP.
200 eHP *is* a bigger improvement for the guy at 3000 eHP than the guy at 6900 eHP. That is where the additional, illusory, diminishing returns shows up, and the actual reason you balance health and resist items.