1. In some cases it may be a bug, however...in others it is because its a tanking piece.

Dragoons can wear both Leather and Plate, however the problem comes when there are actually 4 types of armor.

Tanking Plate - Labeled as WAR/PLD/DRG With parry and high vit. Dragoons can use this but cannot need.
DPS Plate - Labeled as WAR/PLD/DRGWith crit generally. Dragoons can use this, and can need. Tanks can use it, but cannot need.
STR Leather - Labeled typically as DoW. Dragoons can use this, just as well as monks, but cannot need, because it is monk's priority.
DEX Leather - Labeled typically as DoW. Dragoons can use this, but extremely poorly, and obviously they cannot need.

So as you can see, of the 4 types of armor that you "can" use, and have your class labeled, you can only actually need on one of them (DPS Plate).

What I believe happened is you saw either a piece of Tanking plate or STR Leather.

2. Not entirely sure on limit break, but people swear that buffs help and that it can crit. I am of the personal opinion that it is dependent entirely on weapon damage.