Basically, it is a weaker version of Super Spy's Advanced Armor. The Spy Vest offers extreme protection compared to other vests. Donning the vest is essentially the same as having 200HP, for the Spy Vest will absorb all gunshots to the spy's AP before being depleted. Explosives, melee, and falls on the other hand, hurt the HP first. headshots will always deal an instant kill.
Upon losing AP with this vest (getting shot at a lot), the player will have no signal (the red circle that appears when you are hurt) until all the AP is gone.