I don't get why the armor will change style to fit the racial armor style. It doesn't make any sense, and it will broke the game immersion by a certain ammount.
You said that the armor set will be similar from race to race ... but at the end in the image of the wiki i saw two totally different armors (dwarf one and elf).. the only thing they have in common is the grey color xD .
If it was just the size that changed maybe was better ... but i get your point , you want a certain race to wear only racial armors , not exotic one xD what the hell is this?? a fk catwalk for models? Or a rpg game??? Are you dictators? xD Elf wear elf style .. it's prohibited to use any dwarf one for them ... it's a divine law . No it's a game , a rpg style game.
So i think this feature need to be changed.
Motivations:
1- First of all the player need to choose what to look like, and what to wear ... his style. It's part of the gameplay of a rpg game, just watch Asmonbald doing transmog competitions xD do you think it will be fun to just see an elf with only elf armor styles, or a dwarf with the same dwarf style? Where is the customization? Or the fun to just use everything you want , even if it leads to an obscene result. It's the player choise, and fun.
2- Collecting sets. The armor is like a mount .. you get it and you keep it. What if you go to buy a mount of another race but when you summon him it will transform into your racial mount? You want the exact same mount ... you want to collect stuff. Sure you can add a saddle that rappresent your race, but the mount should not change, why the armor should?
Do you want to add some characterization? i have some suggestion later on.
3- Droppable and craftable items, the difference between those is that the craftable is a custom one, that will fit the style of the creator. In this case you can make racial armor sets that follow the racial style, but if you take an orc armor and magically it will change into an elf one it doesn't make any sense, you want the orc style becouse it's what you got from the adventure!!!
When you drop an unique style you want to keep it as it is. trophy. Droppable items have droppable style (exotic style), craftable one have a craftable style (racial or personal style).
4- I don't know how it will change.. magically? changing between a style to another ... magic i guess? from what? It breaks immersion by a lot, it's stupid and doesn't make too much sense. This can be easly fixed though.
5- it will take you more time to make all this different variations of a single set for no purpose. that's a waste of time into a feature that is not good for the game. It takes resources .. for what? It doesn't change the gameplay or anything. Instead you can design more armor style and make more content to play with, doing so it will be way better to get all those different sets and style, instead of just having few, that will change automatically their appearence. Let the player play .. or "let the kids play" as someone said xD This is an unecessary work that will delete part of the gameplay aspect and the freedom of a player.
6- It doesn't make any logic sense to get an armor from a different culture, with a certain design ... and then change it to another type of armor. An elf armor that has round edges to facilitate agility and moviment .. with an increase in the agility.. weared by a dwarf it become squared... ?
7-and other motivation i missed or minor one.
How to fix or resolve this problem without giving up your idea of racial design?
Of course a dwarf armor cannot fit a orc body, in this case the easiest way but the worst of course is to just scale it up to fit him, automatically, like wow and other games do.
Anyway the blacksmit profession exist, it has a rule in the game ... why not using it?
to make an armor of a different race you need an artisan or a player with the profession. To scale it up/down or change it, to modify it. Decomponing and rebuilding it to fit the player. Or maybe you (the player with blacksmith profession) can get the blueprint to replicate it.
Of course some armor will be unchangeable.
Anyway that's not the only option ... you can always trade it in the market to get the armor you need or want. This will make the AH more usefull and fun, or just more interactive. It gives sense to the selling mechanics, if you have something that you don't need, instead of stuffing everything into the bank becouse you can use it.
Also the player have the transmog option, if they want to wear an armor with a racial look they can simply use the transmog right? So that's pretty much useless to add this heavy feature ... remove it.
Instead you can make different versions of the same set if you want, giving the freedom of choise to the player on what he can wear. An eagle set can have the elf version and the dwarf version available for drop, this way you get 2 or more sets, instead of 1 with this "Racial appearence" feature. The eagle dwarf set will increase maybe the defense and the elf eagle set the speed.
It will give to items more uniqueness if it has a race bonus/limitation or maybe a size stat. The item will be more rare and get value, making the game more interesting overall. Instead of just stats bonusses. It will add more value to the professions, and more depth into the game.
Anyway i don't like that you can wear only elvish style armor if you are an elf, it doesn't make sense with the lore and anything else. I just don't like it ... we are the players not you (devs) .. sometimes i think that your personality (devs personality) is more inclined to a player one instead of a game developer one. A game developper think differently to a gamer. You try to make the stuff look cool instead of trying to give to the player that choise. You are playing instead of making a game sometimes.
You also said that you are old player .. and that's great to build a nice game, but it's needed a different view to make games too. I have the mindset of a game designer, so my weak point is to not listen that much to the other opinions about the game sometimes, i have an idea and i follow my idea ... regardeless if it's actually good or bad. But you are too easly influenced by the people need or your game expirience and don't know how to build an idea to make it work into a game. An example is wow .. they usually get bad ideas and they never listen to the audience.
I'm a bit off topic right now .. sry, i wrote too much non sense stuff. Anyway i tried to send you a message for the job of junior game designer , you never replied me

devs ..
I'm sry for my italian english xD
Give to me a good explanation to that game choise anyway.. pls, thz

Hope the best.