RM2 GM here and yeah, we reduced the MM and all other penalties an AT had on a one for one % point basis if an item had a Magic bonus.
For repairs, I ended up loving the Betrayal at Krondor rules where % reductions accrued with each battle/crit(A=.1%, B=.2% or sub whatever you want in).
Since PCs kept track of Crits dealt for XP, it was an easy side track to tally for the GM - after game sessions/combats.
I loved gritty and crunchy combat background details.
The players didn't need to track this, I did.
Depending on the difference between 100% STR for a brand new purchase and whenever one eventually repaired their armour/weapon, etc. due to item wear and tear, the new maximum item STR value would be:
Current item STR% value + [(Current Max item STR%-Current STR% value)/2].
So someone successfully repairing their armour/weapon when it was at 50% wouldn't get a full 100% for a new item ever again as max STR for the item, but would end up with a new max Item STR of 75%=50+(100-50)/2=50+25.
Always round down for any decimal result.
After the first repair, the formula changes subbing the new current value after repairs, as the ceiling instead of the 100n.
So, waiting until the 50% mark is reached before the PC opts to repair the item once again, later in the campaign, shows:
Current 50% value + [(Previously repaired max of 75%-Current 50% value)/2] = 50% + (25%/2) = 50% + 12% = 62%.
Diminishing returns after that ensured an actual economy generated from PC treasure replacement.
To get back on topic with this system, actual Magical items were hardier for my campaigns where both the maximum STR of repairing magic items stayed at 100%(brand new) and crits calling for auto-breaks were reduced to 2d10%(or insert % reduction of item STR you wish) instead of 10d10% for "mundane" non-magic materials.
Adopt a no mundane repair policy for Magic items with this, if you choose, too.