The original Ahab is not Warrior-Class, and thus could not equip the armor. If I'm getting my timelines right, his armor was printed before he was reprinted as a tin card (when he became WC). Basically, this effect allowed the old Ahab to retain this as a weapon, even though he is not WC, if it is played on him during battle.
However, it does not override normal rules about how many weapons can be held. He can still only keep and hold one weapon, since this does not say he is allowed to hold more. So the WC version still can keep this as a weapon, but at the exclusion of holding another weapon.
