Or maybe the point is that SE realized it is not fine in retrospect and so are choosing to avoid making the same mistake with Hrothgar and Viera by hiding the gear with the severe clipping (though the Oldrose headpiece really isn't that bad compared to some of the other common clipping issues).
SE could go ahead and allow all headgear to be visible regardless of clipping issues and they'd get a ton of comments about how this is a crappy low budget game with the poor way things look.
Or they could have chosen not to release Viera and Hrothgar at all, which would have upset the small portion of the player base that was demanding new races but wouldn't have caused any concerns about quality.
Instead they went the middle ground - provided the new races but limited the options where the clipping problems would be extreme.
Personally, I think they should have skipped adding the races and let people whine about that instead.