There are many armors in this alchemy tree, but deciding among them is actually a simple process. You just have to make three decisions that are almost independent of each other: damage protection, status resistance, and offensive bonuses.

All of the armors in this tree carry normal protection. When you upgrade the 1-star Padded Cap to 2 stars, you select your secondary damage protection.
* piercing (Pathfinder)
* elemental (Sentinel)
* shadow (Shade)

When you upgrade to 3 stars, you select your status resistances.
* fire+ and shock- (Firefly)
* shock+ and freeze- (Falcon)
* freeze+ and poison- (Grizzly)
* poison+ and fire- (Snakebite)

When you upgrade to 4 stars, there is no choice to be made. When you upgrade to 5 stars, you select your offensive bonus.
* handgun damage+1 against all enemies (Pathfinder, Sentinel, Shade)
* handgun damage+2 against slimes (Hazard) or beasts (Guerrilla)
* handgun damage+2 against gremlins (Wraith) or constructs (Keeper)
* handgun damage+2 against fiends (Hex) or undead (Ghost)

All of these choices are independent of each other, except that:
* You can get Hazard and Guerrilla only through Pathfinder.
* You can get Wraith and Keeper only through Sentinel.
* You can get Hex and Ghost only through Shade.
That is, family-specific damage bonuses are available only on the armor that protects against that family. Mostly this limitation is good for players. It prevents you from making bad armor, where the offense doesn't match the defense (e.g. Arcane Salamander).

So you simply have to pick what you want, based on what your goals are. For example, is your goal to run Firestorm Citadel more efficiently? Then you want Firefly for status resistance. You'll probably want either Sentinel (elemental and blanket+1), Shade (shadow and blanket+1), or Ghost (shadow and undead +2).