I don't see why this wouldn't work? The only hiccup I can see is how stringently you want to consider the inability to use a normal suit of armor while using Arcane Armor.
If you view it as "Any Arcane Armor you have on you that is not currently at 0 Armor overrides any other armor you're wearing", then the Arcane Armor has to be breached before you could Mystic Smith your normal suit and use it; this is my personal take on how Arcane Armor works, which makes the Mystic Smith backup less than ideal, since the primary scenario in which the quick refit is needed is when dealing with nasty Carrier Attacks like Doom or Confine, and it's unlikely that you'll be brought to exactly 0 armor.
If you view it as "You can switch back and forth between Arcane Armor and any other suit you're wearing by refitting one or the other", then you can wait until your Arcane Armor is at just a few points before refitting your normal suit of armor; Arcane Armor was, I believe, ruled to prevent you from using any Rituals present on a suit of armor it's suppressing, so you couldn't use the Mystic Smith, anyway, which I think renders the combo no more viable than just refitting the Arcane Armor.
ETA: Found a couple of posts from Polare back in the archived playtest forum that support the "no using Rituals on armor that isn't 'active'" interpretation.
This post says that you only gain the benefits of enchantments on armor you're actually wearing, and
this post says a suit of armor only works when you're wearing it as Marshaled, and in the case of an enchanted suit, using the correct tag.
Combined, these throw out interpretation 1 (although I'll still run my own that way if I ever decide to use any, because it's easier in my head) because you can always choose to refit and switch between Arcane Armor and normal armor that way, but it does support the interpretation that you couldn't wait until the Arcane Armor got low and then Mystic Smith your regular suit to switch, since Mystic Smith would be on an 'inactive' armor tag.
You could theoretically get around this by putting the Arcane Armor on something relatively small and simply throwing it off your person to avoid the normal refit time for the switch, but I feel like that's somehow a violation of the spirit of how Arcane and regular armor are supposed to interact.