Officially: excess hits are applied without consideration of armor or other targets save values, as long as the type of Firepower that hit the first unit in the stack is capable of damaging the second unit.
By way of Designer Notes:
You are, in effect traveling in one large group. There is no magic divider between counters when you pack 8 tanks in a space that now puts them at roughly 50 yards (i.e. minimum tactical) separation.
The advantage of stacking? Squeezing 8 tanks into a hex, so you have more units at an optimal firing range. Or can pack more units into blind spots of LOS. Or keeping your formations tight moving across the board.
The disadvantage? Exposure to Excess hits.
The origin of the rule? The tankers I spoke to during the design process told me that when targets arrive in the kill zone (a hex) in quick succession (stacked) it is simply easier to change targets and get more kills in less time than attempting to target them in separated locations (separate hexes).
So, UNLIKE other games of the same scale, there is a tactical tradeoff, as stacking is no longer free and literally comes with risks. The solution? As was mentioned, and as I think most Sergeants would say, Don't Bunch Up. But you have the OPTION to take the risk. When and where is what influences your tactical choices. And this game is all about platoon tactics.
I feel that it is a subtle but telling effect that other games simply don't have. I am proud of its effect on tactics. It feels real to me.
Further, when faced with a situation where you have a stacked set of mixed light and heavy armor, both tankers and APC drivers I spoke to concurred that neither liked being in close proximity to the other for practical reasons. APCs did not like being near tanks because the heavies drew heavy caliber fire; while tanks did not like being near APCs because the chaos of an evasive maneuvering response when the APCs were attacked (including easy brew-ups) could cause a collision or force the tanks to maneuver around them and involuntarily expose of a flank. Consequently, it is dangerous to be in a stack of mixed type because you can target the Light Armor and excess hits will apply to the heavy armor without saves. You have to be careful in your tactical deployment.
And finally, this is consistent with the rule that says that stacking limits are in effect at all times. Go over the stacking limit? Excess units are eliminated. Pack two units into a hex i.e. not going over the stacking limit, but maxing it out? You are a juicy target. :-)