By focusing on block HP, you can lower the HP gains that overlapping allows but a determined player can still dock on more entities to overlap and thus, increase their armor.
Slabs and wedges can be fit together in the way you explain but there are other tricks as well.
For example, by using plex-doors, blast doors, rail-spawning etc. there is no real limit to how many blocks a player can overlap. They are only limited by the power of their computer and their desire for thrust; which is of course irrelevant if they are building a station.
So no matter how far you cut block HP, a player can continue to overlap blocks until he "un-nerfs" himself then starts stacking on more armor. So not only did you not stop the cheater but you've nerfed everyone else's armor who is playing fair.
My method is geared toward blocking the exploit directly at its source (the overlapping blocks) without breaking everyone's existing builds.
Does that make more sense?