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"Is it only on the light wood armor since it's that's the only place mentioned?"
Yes.

If this was in the PF lists of Magical Armor Enchantments I might just have a limitation similar to the one expressed in the quoted text (even if it's expression only implied by omission in other similar text.) It is apparently limited to just light wooden armor, but the enchantment could also be a mass limit per enchantment slot used, with the wooden limitation being a side effect of the bio-mancer character class.

But I, writing it as a PF armor enchantment, would frame the descriptive text that defines the Enchantment more in line with the PF game's limitations. Only able to transform the armor into a crafted object and back. In addition, there could also a command word limitation in a PF style enchantment.

Gammer comment: Using the word 'liquefaction' brings up the super ability of the same name. Which I thought you were going to talk about from just reading the title.

I always pictured the chitin armour just becoming insects again and settling in a ball, until you want them to swarm over you again.

Yes, I have always allowed all four armours to be 'removable' in whatever way the player envisioned it happening. It adds to the uniqueness and just plain oddness to the armour. And is strongly implied in the descriptions. But that is certainly my house rule, the rules as written are pretty limited.