If a character is defeated in battle but prevents the loss of life from Armour or the Preservation Spell, does he still have to discard the Fiend Slayer?
Fiend Slayer lost if Armour or Preservation Spell used?
Yes, you only have to lose a battle or psychic combat; it doesn't matter whether you lose a life or not.
Would Full Plate prevent the loss of the Fiend Slayer?
Yes.