i keep encountering Gatekeeper's with 7 armor. i keep prolonging the game with sabotage resistance order and more and more powerful units keep coming. is there a limit to how much armor they can have and what exactly determines their armor points? is it time or the strength of my squad?
Gatekeepers are the highest armor enemies in the game. They are also pretty much at the end of the alien power tree. So, it shouldn't get any harder quality wise, only in terms of quantity.
The strength of enemies is a mix of time and your strongest possible squad. If you have a bad early game and don't manage to get higher level soldiers, the difficulty curve will rise slower than when your main squad just aces every mission and you have a troop full of colonels by July.
Difficulty also plays an important role. On Legend difficulty all progression is slowed down a lot.
In general aliens reach top tier troops between September 2035 and February 2036 on lower than Legend, on Legend it's more like December 2035 to May 2036.
The Chosen will each gain one armor point each time one of them completes a Training task, except for the first one or two times they train (though I play on Veteran; it could be different for Legend). Training operations can sometimes be countered through the Resistance Ring. I am not sure whether there is a limit to this, but keep the Chosen down and you should be fine.
But other than that? The Gatekeeper is the most armor you will encounter. Standard enemy stats are predetermined in the config files, and the enemies you encounter will just slowly grow to include the stronger enemies.
There is also a dark event that adds armor to ADVENT units, but unless you have the
Second Wave additional option to make dark events permanent I wouldn't worry about it.