First of all, PVP argument is moot. This system can easily be done so it is automatically disable in PVP.
As some of us read somewhere in the past, some people have been hinting that some day they would like to implement clothing via costume slot.
In my opinion, this is terrible idea and needs to be adressed even while clothing is years in the future.
Much better system in many ways, would be to implements cosmetic outfits slots similar to what Lord Of The Rings Online has. In that system, you can have whatever gear equipped to give right stats for your character while meanwhile having the looks of say, iron plate from levels 1 to 14 if you want or combinations of gear of your choosing. Also you could mix clothing with armors and basically have any look you want. If you dont like the shiny look of Veteran armor and want to look as weary adventurer with worn out armor, made from pieces you supposedly looted on your adventures, this would totally be possible. Winwin for RP and those who just want a certain look for their character.
There could also be multiple sets of cosmetic slots to change or make an addon to automatically change based on yoour location.
System like this hasvast possibilities compared to costume slot where you basically can only use what someone else has given to you. In this case art team would propably choose aproriate clothing for you. Too limiting, please do not add clothing as part of costume slot system. Have them exist as craftable, improvable and dye-able system so that each player can truly choose the outlook they want.
EDIT: There could be one small restriction that some folks may deem necessary, i wont like it but i would accept it without complaint. Restriction i would suggest is that cosmetic slots recognize what armor you have in your "Armor slots". Then, when you place pieces of armor to your cosmetic slots, you could only add a piece of armor which exists in armor slot. For example if you have light armor in head, you can only place light armor in cosmetic slot. If rest of slots are heavy, then rest can only be heavy.
Light to light
Medium to medium
heavy to heavy
Why i would not like this? Reason is, it limits my roleplaying possibilities while i am adventuring, How? Well, if my hero or heroine is suchm that the equipment is just some clothing with simple blade, a poor adventurer doing some work around Tamriel and hunting tresures for fortune. I could not do this if i wear medium or heavy armor. Most likely my equipment would be on character like this as follows
-Heavy helm
-Clothing houlders (Scarf or such)
-Heavy chest
-Clothing pants
-Medium boots
-No shown gloers
-worn out basic sword.
You can see where that goes wrong if i am a Nightblade in full medium or Sorcerer in full light. Even full heavy warrior wont work. I want my character look as what he or she is. I dont play as myself, i play as character and that is why those things matter so much to me.
Here is a small video of LOTRO system for those who have not used it.
https://www.youtube.com/watch?v=4HlpSifILWg