The blinking problem never occured to me when I first suggested this, getting rid of that would be the icing on the cake for me, though I can see why some people would still want it. Personally I always hated switching equipment and then losing the lock on the mob I was fighting.

I suppose there could be a toggle in the game settings, so that if you don't want to see other people's costumes you could turn the effect off.

Or for those who are concerned with knowing what gear their team mates are wearing SE could make it so you can't hide you character information if you choose to be wearing a costume. That way you could still check the player out.