Perfect deflection would mean that an enemy would need more than a 100% penetration rate to get through for major damage. Armor is still important, but I would be happy with 99% deflection as you know for sure that no* massive hits will get through.
When an enemy attacks you, they roll a D100 against (you Deflection - their Penetration).
Say you have 99% Deflection, they have 40% Penetration. That means they are rolling a D100 against 59. They have a 40% chance of getting a Penetrating hit.
You can get Deflection as high as you can, it can go well over 100%. With 99%, Penetrating hits are going to be pretty unlikely with weaker monsters, but I wouldn't consider you safe yet from Goliaths or Narvidians.