I am running a 6th level human Battle Smith artificer. I have a steel defender companion.
Can my character enter the defender like it was a suit of armor in an emergency situation (e.g. if my health is low and I need to make a quick exit to get to a safe place for healing)?
The Steel Defender feature description and statblock tells you how the steel defender works, and it says nothing about wearing the steel defender as a suit of armor. So you can’t do that.
The Artificer Battle Smith's Steel Defender feature says:
You determine the creature's appearance and whether it has two legs or four;...
At first glance, this might appear to offer you license to declare that the appearance of your Steel Defender is that of a 'hollow suit of armor', and specifically one that is perfectly sized for you to fit inside. However, this idea is quickly quashed by finishing the line:
...your choice has no effect on its game statistics.
Thus regardless of what you choose the appearance of your Steel Defender to be, it remains a size medium construct. Since you are a human (and size medium as well), so long as both you and the Defender are living creatures, you cannot willingly share the same space, which means you would not be able to "enter it" in order to find a "safe place for healing".
If you were size Small, perhaps some allowance might be made for creating a Defender specifically designed to provide you cover and obscurement, and arguably you could share its space by treating it as your mount. However, note that the Defender is supposed to be your faithful companion, and protect you by means of its Deflect Attack. No mention is made of you wearing it like armor. And for Artificers who do specialize in making armor (that is, Armorers), their Guardian model at best produces a Defensive Field which grants you temporary hp, but nothing like a 'safe place' to retreat inside. If the Artificers that actually do make armor don't make such a thing, it does not seem reasonable to rule that a Battle Smith would be able to.
You might consider a dip in Warlock with a Genie patron if "a safe place for healing" is what you are after.
You will need to work with your DM. The Steel Defender says:
You determine the creature's appearance and whether it has two legs or four
but you will not be able to get a direct increase in armor class, since:
...your choice has no effect on its game statistics
Whether two legs or four, your DM might allow a two-legged defender to carry you, or for you to ride a four-legged defender, since with a strength of 14, the steel defender can carry 210 lbs easily, and more at a slower pace. Since the rules to not mention carrying or riding, you'll need to work with your DM. A strict interpretation might be that since the rules don't say it can carry you or you can ride it, you can't, but it's a reasonable conversation to have with your DM.
Note that mechanically, being carrying or riding it is the same as being "inside" the defender, since being inside the defender gives you no mechanical advantages.
In addition, since the defender has Deflect Attack:
Deflect Attack. The defender imposes disadvantage on the attack roll of one creature it can see that is within 5 feet of it, provided the attack roll is against a creature other than the defender
in some circumstances the DM may impose disadvantage on someone attacking you while the defender is carrying you or you are riding it.
Finally, with a 4 intelligence a steel defender is much smarter than a riding horse, it understands the languages you speak, and if you are incapacitated, the defender can take any action of its choice. You might be able to work with your DM to train your defender to take specific actions if you are incapacitated, such as pulling you out of combat.
You can't get the full-on powered armor you might be envisioning, but you might be able to work with your DM to realize your concept within the rules of the game. The steel defender is a key element of the Battle Smith subclass, and making it fun and useful is pretty reasonable. Have fun!
RAW,
You determine the creature's appearance
and, while it's true that
...your choice has no effect on its game statistics
no game statistics need change for a Steel Defender to provide cover, since other creatures can provide cover.
Walls, trees, creatures, and other obstacles can provide cover during combat, making a target more difficult to harm. A target can benefit from cover only when an attack or other effect originates on the opposite side of the cover.
A creature, like the Steel Defender, can provide at least half cover.
There are three degrees of cover. If a target is behind multiple sources of cover, only the most protective degree of cover applies; the degrees aren't added together. For example, if a target is behind a creature that gives half cover and a tree trunk that gives three-quarters cover, the target has three-quarters cover.
Half cover provides +2 to AC, while three-quarters cover is +5.
Now, the Steel Defender is a Medium sized creature, and cannot share the same space as another Medium creature. So, it could not serve as a suit of armor for a Medium or larger creature. But, it can share that space with a Small or Tiny creature. And, it can even serve as that creature's mount.
It's perfectly feasible, then, that a player could decide that appearance of a Steel Defender includes a Small chamber that could accommodate part--or even all--of a Small creature.
There is precedent to gain total cover from being inside of another, larger creature, e.g. being swallowed by a Giant Frog.
The frog makes one bite attack against a Small or smaller target it is grappling. ... The swallowed target is blinded and restrained, it has total cover against attacks and other effects outside the frog
The total cover here comes at the cost of being blinded and restrained. Moreover, the frog can only Swallow creatures smaller than itself. So, you would have to work with your DM to determine what degree of cover is appropriate for your PC, and at what cost.
So, yes, its feasible that a Small creature, at least, could gain cover from its Medium Steel Defender Mount by constructing a chamber within it. And, maybe the chamber could even be structured to provide total cover, if you have a generous DM.
