" You understand the rules correctly.
It is neither unbalanced nor a departure from D&D tradition.
It is not unabalanced because there are many ways to increase the AC of a Wizard, from Mage Armor to bracers of defense etc. Armor is expensive, and it requires that the wizard invest in both the armor, and the strength to make use of the armor, as well as the strength or dex and int to multiclass in the first place. They will also suffer from a reduced spell progression table, and will be behind others in the party for stat progression. Of course, you'd be better off taking 1 level of wardomain cleric, but the cost of dipping in regards to stat improvements or feats is still there.
It's not a departure from D&D tradition, because in all versions, if you picked the right combinations you could negate the arcane spell failures for all intents and purposes. The only people who missed out were those who lacked the system mastery to create the character concept. On the other hand, the generic wizard always had a hard time casting spells in various types of armor, and in this edition is is not merely difficult, but impossible to do so unless you choose the correct rule combinations, which allows you to do so. A wizard who is only a wizard, can not cast spells in heavy armor as has always been the case."
ASF (Arcane Spell Failure)
Medium armor proficiency is the best racial feature for wizards, warlocks, and sorcerers. In BG3, characters have access to half-plate armor early in the game, which sets base AC to 15. For a modest investment of 14 DEX, you can maximize your primary spellcasting ability and CON while still having an AC of 17. You’ll even have a few points left over for other abilities. Mage armor cannot match that. You would need a DEX of 18 to get an AC of with mage armor.
I don’t think it was an accident that all of the 5E races that were given medium armor proficiency did not have a +2 bonus to any primary spell casting ability.
