Is the Worm Scarf or Flesh Knuckles better at damage reduction?
Solution 1:
Since you are looking for an answer that is fact based, here are the facts:
The regular amount of damage taken can be expressed by this formula:
net_damage = attack_damage - (defense * 0.5)
Note: the multiplier '0.5' becomes '0.75' for Expert Mode. Same for the next equation.
This applies for the Flesh Knuckles item along with every other item in the game. However, since the Worm Scarf item has a percent damage reduction, the formula for the total damage taken for it is a bit more sophisticated:
net_damage = ( attack_damage - (defense * 0.5) ) * (1.0 - 0.17)
Analysing these equations tells us several things.
If you have more then 2x the Defense of the Attack Damage, the damage done will be zero, no matter what items you have. The same applies for Expert mode, except for a different Defense/Attack Damage ratio.
The Worm Scarf will always take more damage off assuming the same level of Defense
After a little bit of analysis, I have determined that, without any other armor or buffs, wearing the Flesh Knuckles will be more effective and take off more damage than the Worm Scarf, up to the point where the incoming damage is equal to 22.58 points of damage. After this point, the Worm Scarf will become much more effective of an item. Here are some examples of this circumstance:
Flesh Knuckles
Incoming Damage = 10
net_damage = 10 - (11 * 0.5) = 4.5
Damage Blocked = 5.5
Incoming Damage = 20
net_damage = 20 - (11 * 0.5) = 14.5
Damage Blocked = 5.5
Incoming Damage = 25
net_damage = 25 - (11 * 0.5) = 19.5
Damage Blocked = 5.5
Worm Scarf
Incoming Damage = 10
net_damage = ( 10 - (4 * 0.5) ) * (1 - .17) = 6.64
Damage Blocked = 3.36
Incoming Damage = 20
net_damage = ( 20 - (4 * 0.5) ) * (1 - .17) = 14.94
Damage Blocked = 5.06
Incoming Damage = 25
net_damage = ( 25 - (4 * 0.5) ) * (1 - .17) = 19.09
Damage Blocked = 5.91
In Conclusion
As you can see, the damage blocked by the Flesh Knuckles is a constant 5.5 damage, and does not depend on the damage of the attack, only on the total defense score (which for our example was 11). Furthermore, we can see that while the worm scarf did not block as much damage while the incoming damage was under 22.58, after it reached that point, it blocked more damage.
It is important to keep in mind that this is just an example, and many in-game situations are far more complex than this one. However, I feel as though it is safe to say that the Worm Scarf will be far more beneficial to you in the long run, as the percentage (rather than flat) damage reduction will be invaluable.