I've read this with great interest. The legality of selling armor made by anyone of us is a gray area. I believe it depends on what type of items you are selling. If you make a one-off costume and you sell it to a friend, there is noting illegal about it. You are doing a friend a favor and your friend is paying you for the work. You can't, however, mass produce your costumes without getting the OK and pay royalty to Microsoft. For example, costumes that you see in Wal-Mart or Party City contain licensing fees.
If you sell the costumes you make and claim it as Microsoft product, or Bungie approved, you violate copyright law and whatever law comes with it. In no way shape or form you can sell your home-made costumes with Microsoft branding on it.
For example: you can print Andy Warhol paintings as long as you have the license to do so. However, if you decide to paint a painting similar to Andy Warhol and sell it to your friend, you are not breaking any law. However, if you claim that it is the exact replica and that the estate of Andy Warhol claims it so, then you are liable.
Law is a funny thing. It really based on common sense and the proof that someone is hurt by whatever action you did. If Microsoft is not hurt by you selling a costume, Microsoft is not going to pursue you.