With the new patch 0.1 it was added a new feature, material strength.
This new feature enables objects or bodies based on their material to be pierced, stop or deflect arrows. As an example lets take a wooden shield, it can be pierced, stop or deflect wooden arrows, but an iron shield has a material stronger than wood, this type of shield would always stop the wooden arrows or deflect them.
If an arrow is piercing an object or body it will continue forward damaging anything in it’s path until it will be stopped. A deflected arrow is also able to do further damage.
Some type of objects cannot deflect arrows, for example flesh or cloth armor.