So in Blame!7 Iko gives Cibo a Safeguardsuit, because as he said:
it was closest to what the wore before.....

Initially, this suit was without sleeves.
There is an inbuild radio (thats why Cibo was able to overhear communication between Dhomo and Iko) and some kind of "magic wand", which seems to be able to control certain things. She stuns Dhomo with it, opens doors, and somehow defeats a safeguard.

After her escape Dhomo and her are attacked by exterminators, then there is this picture where her suit transform into some kind of short coat and the approaching exterminators dissolve....but only those near to her, because another approaching one is unharmed and gets finished by Dhomo....
Anybody has an explanation ?

It is possible that it was used by the pre-safeguard system (Killy and Dhomo and Iko are part of it though they seem to be part of different sections becuase they don't trust each other) to defend humans.

On the previous page you see the suit deploying tendrils in the bottol panel. With the sudden transition to what looks like rigid armor in this panel I surmise that the deployment of both armor and the distruction of the safeguard assailants within the immediate proximity of Cibo that it's part of the Safeguard suit's defence mechanism to preserve the life of it's user through the transition process.

Possibly because the armor was designed to be deployed on short notice in a bad situation.

What may be more difficult to explain is why did you decide upload that image to fapomatic

Well, Nihei could think of 100 answers for that, but for me it remains to be a simple manga- element.

I mean, its just like dragonball, Son Goku and that kind..., a fighter gets new power and energy (or whatever new) and because of that he creates some kind of shockwave around him which blasts everything away.

Let Cibo have her attention swooooosh, get lost, stupid silicons!

Seems simple to me... when worn by a Safeguard, the suit is capable of transforming and shooting out spikes, sprouting wings, etc. The SGs around Cibo were shredded by the spikes coming out of her suit; the sound effects in the German version must be a mistranslation.

If worn by a normal human, the suit would probably provide a bit of defense and no more... Domo assumed that Cibo was a human, but didn't know her body had SG technology from Sanakan.

I've assumed that the reason Domo and Iko have wills of their own and are not subservient to the general SG authority is that their section of the Megastructure was never completely integrated into the Netsphere. Their technology also seems to be a bit more primitive than other Safeguard equipment--they lack GBEs, for example.