The main problem with this form of armor, as far as I know and as others have already said, is that nobody actually know how it was made... someone has already pointed out that it could be a fantasy design.
Here is a nice article talking about this armor:
We can't say how effective Mountain Scale armor without knowing the design, as someone said. However, given how widespread the armor appeared to have been, it seems likely that it was effective, else it wouldn't have been as common as it seems to be.
Even if ceremonial, most ceremonial armor was inspired by real armor, and I don't think it was that likely it was so widely shown simply because it was good looking.