While I don't care what people do in their single player games, in multiplayer changing your look should have certain boundaries. I don't want anyone in my MP party to wear a Full Plate Mail, but look like they have a chainmail bikini, Orin's flesh suit or some topless camp pants on.
Generally I think a better approach would be to just have a lot of armors with different designs available. And then a dye system on top. So the player can choose between a sleek stealthy leather armor, or an army style studded leather. Likely their stats would already reflect your class and playstyle well. Or a dwarven style angular plate armor, or some organic elven style with leaf shaped decorations or whataever. But I don't like complete transmog freedom that just makes a mess out of the original designs that make sense and have context. I'd prefer an RPG where Githyanki would attack you for wearing their armor, assuming you stole it or killed some Gith.
I trust the devs more than players in their ability to make the game look good while maintaining a required level of mechanical feedback, such as what wearing Heavy Armor implies for Stealth abilities. Heavy needs to always look heavy. I don't want the confusion of looking naked while mechanically wearing heavy armor.
