it was great to start with, until chapter 2 where i found loads of armour better than it.

the description says that its the best armour in the game for swordsman.
not with only 11 armour rating it aint, and thats what it was halfway through chapter 2 @ lvl19!

so is it bugged, is it crap anyway, is it just some cool starter armour and the description is misleading?

Prolly misleading. I dropped all bonus and imported items for my current run and now starting act 2, I was really happy with all I found/crafted in Act 1. Hunter's Armor and Superb Silver Sword, Jagged Blade, with good runs and reinforcements made act 1 very enjoyable at Hard diff. And better char development helped too.

There's no need for items other than the game already gives us. They're the best!