The idea is the nanomachines are interlocking and using themselves to rebuild damaged sections making a weaker but still structurally sound amour and when damage becomes too extensive  they cannibalize unimportant parts and systems to make more machines to interlock and seal hull breaches.  No idea where atomic manipulation came up there.

Removed shield idea, working on a new one.

As for the power responsible, does anyone want to do that?   It really doesn't matter beyond a tiny bit of shared history since I left before the annexation anyway.