Well because the black armour reflects damage to attacker and since Usato uses healing, there are no damage to reflect. I don't remember in were but I think it was said in previuos chapters that demons can't use healing magic or smth like that. :) The armour also depends on psychological condition of the owner and since that demon felt pain she couldn't consentrate properly to maintain her defence.
I think it was because her magic only reflects damage to the armor. However, because Usato heals his own wounds constantly, the magic couldn't be reflected onto him, and she was hit through her armor. And armor isn't a living thing, so Usato can't heal it. Usato was damaging the armor, and she was getting hurt through the armor because the magic wasn't reflecting the damage. (I think anyway.)
Hmmmm... I think because Usato is using healing magic on himself he isn't affected by the armor that reflects attacks. As to the demon accumulating damage, it's because Usato concentrated mana on his first and since the armor natural weakness is healing magic, they cancel each other's effect (the demon's armor's backlash and Usato's healing). Since the healing is canceled, what's left is his physical strength which is by no means human, therefore, the demon is naturally wounded. And also since no one really noticed that she's wounded because she activates her armor whenever there's people around when she was captured, it just got worse since her internal organs might have been damaged because of Usato's punch. But since demons are tougher she didn't die in the end.
That's what I think anyway. ┑( ̄Д  ̄)┍
I'm a bit late to the party, but I was confused about something and had to ask. The way Usato described his healing punch, he heals all the damage he inflicts as he deals it, leaving only pain to build and accumulate until the body can't take anymore and passes out. So then, why did the Black Knight girl still have so much extensive damage? Shouldn't that have been healed the instant it happened? Did I miss something?