It could bring plenty to the table for folks on PS4 or weaker PCs. FFXI implemented their gear display toggle for performance issues since it's easier to only have to load a small spread of outfits rather than all the many different items per character on screen. It's not pointless or dumb just because you personally don't like it.
While the dev team could overcomplicate it like that... it's -probably- more likely and far easier that they just have the toggle load up predetermined gear based on job instead of making some kind of gear blacklist that the client sifts through and checkmarks (good god that'd be a stupid way to do this), and knowing the horrendous spaghetti code of XI cannot be much worse than XIV's I don't see it taking away something so drastic as another dungeon per patch especially with us already being down to one already.