Still, for prolonged enjoyment of their company, I would strongly suggest issuing the command to flee after combat and leave the encounter only after they do, since so far this seems to be a good way to actually keep them.
Companions armors are NOT detoriorating when they get hitted or killed. Armor can break or detoriorate only when companion dies with brutal dead animation. my companions were wearing CA's very long time and armor was 100/100 all time.And here is useful tip. When you die on enco and your companions will survive, they automatically join your party on world map. but they're on "stay here" mode and you need tell them to follow you again. if you wont change their mode and If you enter any enco and leave map before you change them to "Let's go" mode, they will permamently disappear. Its very important to make them follow you after your death. (lost 2 very good companions this way)