Say the upgraded character has 2 Armors and Defensive Configuration is scrapped. What happens?
[Source: WotC] 
In most cases, this means the character won’t have enough Armor slots to keep both Armors. If it’s your character, you choose which one the character keeps. The other one is scrapped.
Let's say I've got an Armor on one of my characters as well as Defensive Configuration, giving me an extra empty Armor slot. I then play
Hunker Down which checks to see if I have an Armor or not. Since Configuration will be giving me an empty Armor slot, would I be able to put an Armor on my character through Hunker, or will it not work since I do still have an Armor in the 1st Armor slot?
[Source: WotC]
It will not work since your Tank already has an Armor attached.
Crystal of Power is both a Weapon and an Armor, and per its reminder text, fills 2 slots on your character. The actual reminder text however is confusing when it comes to
Megatron. It says "This occupies 1 Weapon slot and 1 Armor slot", which when compared to Megatron's ability to "be upgraded with a Weapon in his Armor and/or Utility slots" makes it sound as though Crystal of Power is overriding Megatron's ability.
This is a good example that reminder text is not rules text. It is there to help someone inexperienced with the game rather than define how a card works. It is fine for Megatron, Living Weapon, to use his Utility slot to fulfill the Weapon condition of Crystal of Power. You couldn't however put the Crystal of Power in his one Armor slot, but if you had a Utility applied like Defensive Configuration, giving you an extra Armor slot, you could put the Crystal of Power in two Armor slots.
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