It gives handgun damage+2 against all enemies. Thus it is equivalent to Shadowsun in its offensive bonus. But it's dirt cheap. If you don't need defense, then you might as well use it. I'm currently building up an alternate knight using Iron Slug, and he often wears Cyclops Cap, because he hasn't upgraded Miracle to Chaos yet.

(An alternative interpretation is that the Vanguards you're seeing want to look as if they're highly skilled and don't need defense. But I'm trying to be more charitable than that.)

For the equivalent armor for swords, check out Fencing Jacket.