This seems like it would easily balance a lot of unused equipment sets and improve the spread of uniqueness throughout the game.
Equipment Set Passive is a unique ability that is obtained only when using a full set of Armor (Perhaps shield too?) and as such cannot be obtained unless you wear the full armor. (as such, no mixing and matching)
So let's look into two underused sets that currently exist within Spiral Knights: Volcanic Plate and Ironmight Plate:
Volcanic Plate Set would grant the wearer the passive "Volcanic Heat." This Passive releases a burst of normal-type damage every two seconds within a very small radius around the wearer. Enemies that are within this radius receive small amount of damage every two seconds. (In theory, imagine it as a perma-haze that deals damage rather than status)
I would suggest having the damage be slightly above that of a three-star shield bash per second up to a maximum of 40 Damage on Depth 28.
Ironmight Plate Set would grant the wearer the passive "Iron Will." This passive upon taking damage, recovers 33.3% of damage received over a timer. For example, if I get hit and take 9 Pips of health, I would recover 3 pips of damage over a short amount of time (0.5/Second). If you take damage while recovering, the recovery effect is instantly removed and replaced with the next hit number. As such, you cannot abuse this mechanic that would otherwise offer infinite health.
This offers a unique way of indirectly buffing equipment while still offering a wider range and expansive abilities for the future that lies ahead.
Every two seconds?... that's pretty slow for a "very small radius."
As it currently stands, you deal 20dps... and you have to be close to the enemy to do this.
-Is it like a halfblock radius, like the Spur charge?
-If the radius is so small, wouldn't it make more sense to increase the rate to every second?
Recover 1/3 of the damage received eh?
Personally I'd like the 1/3 recovery to be instant, so you could constantly be hit a bunch, but your "Iron Will" pulls you through. This way you have the bestest sanic mode of all time.
-Did you consider sonic mode when thinking about the pip recovery? I think sonic mode will apply even with a little bit of healing.
I think you should consider a % damage reduction instead, as Qwez suggested in the days of "I got mah own armor rebalance hear". Then you don't have sanic problems.