Sounds weird but I'd honestly think that Chitin would need to be processed into another type of material.
I'd propose that Chitin gets processed into "Chitin Plates"
Since frankly... saying Chitin is like saying "Skeleton"... and "decorate with skeleton" or "Skeleton Crafts" when really you just want pieces of it.
Plates though! can easily be expanded to include other kinds of animals. Turtle Shell could, for example, be turned into Turtle Plates. As would Rhino Hide...
It should frankly be registered under Bone Armor (since Chitin is bone armor and would be crafted the same way) but the game should recognize that you are using Chitin or shell and call it those respectively.
So when you make Bone armor and use Turtle Shell it should make "Shell Armor" and when you use Giant Ant Chitin it should make "Chitin Armor" and when you use Dragon Bones it should be "Bone armor" and when you use tusks and horns it should make "Ivory Armor"
So... what you're suggesting is turning the chitin into "plates" before they get pieced together into armor?
And you're also suggesting turtle shells be carved into plates before you can armor them?
eh... That's a lot more work for no additional payoff, I just imagine the bone carver cuts the chitin into the shapes s/he needs them in and adheres them together.
I guess I could make Ivory armor, but it wouldn't make an awful lot of sense.
And what you're suggesting below is basically what I was getting at before I went on a magical journey to learn the secrets of reactions, assign the tag [BONE] to chitin so it can be used in the same manner.
It's actually a lot simpler.
But saying "chitin" is not like saying "skeleton." Chitin is a compound.