That still doesn't stop the firebomb that got tossed directly into the crowd, which would scatter and ignite the lot. Also if Wledric's image is any indicator, the only cloth parts of the guards' armor would be a cotton gambeson under their plates, which would take too long to just yank off. Otherwise you have most of your guardsmen stripping down naked.

Also, spears can't serve as lightning rods if you're holding onto them. The electricity can just run through and get them anyways; that's why you don't get under a tree during a thunder storm.