When you get trapped in the cage in the beginning of the mission and Farkas becomes surrounded by the Silver Hand soldiers and they say "If he wears that amor he dies." Would they be talking about the Wolf Armor, if they are then they must be blind because he isn't wearing any Wolf Armor. Could this be something that was overlooked by Beth? It doesn't really matter but I just thought it would be an interesting discussion. Is Farkas supposed to be wearing Wolf Armor?

In past discussions on this topic, yes Farkas should be wearing Wolf Armor. Farkas also has the AI package of a Blacksmith. He likes dropping his Skyforge Claymore for the Player Characters to pick up, too.
This has to be an oversight by Bethesda, but it has not been fixed in six patches.