Normally you can order a follower out of power armour by talking to them and it's one of the options however every time I talk to Deacon he tells me he's having second thoughts about his recall code.
I have tried telling him yes and no about reading it, with no change in the dialog and then the dialog ends meaning I never get to tell him to get out of the power armour. Am I doing something wrong? I want to give him some normal armour to wear too!
This really feels like a bug or design flaw, but it may actually be intentional. Without this restriction, the player may be more prone to avoid the only action that will allow Deacon's story to progress any further. So, this could just be Bethesda's way of "railroading" the player.
The proper solution (per the game's current design) is to actually read the paper containing Deacon's recall code, and then say it to him in conversation. Until you do this, you can work-around the unavailability of a "Dismiss" option by taking on another companion (which forces you to dismiss your current companion). However, there's no non-hostile way to get him out of Power Armor without reading the code.
In fact, the recall code Deacon gives you is fake. This will only be revealed to you when you try reading it to him. At that point, he'll tell you that the code was just a lesson for you to learn. Given that lesson, it's really hard to say what you should believe about Deacon's true nature past this point. It's still actually possible that he is a Synth and the code he gave you just wasn't one that will work.
There is a bit of a work-around. If you want the power armor he’s wearing, you can put another set in your inventory (raider is the cheapest) and simply switch out the equipped pieces by trading with him. He’ll still be stuck in power armor, but you can change which armor he’s wearing without using his recall code.
