When equipping a baby villager with armor using a dispenser and then killing it, it does not drop the armor. However, when done with an adult villager, it does drop the armor.
The workaround is waiting for the baby villager to grow up into an adult, then that villager will drop the armor.
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Additionally, I request this ticket to change its title to "Baby villagers do not drop armor/items when killed"
Can confirm that this is an issue in 20w51a. Giving baby villagers armour via dispensers and then killing them, will not drop the armour that they were wearing.