I see a lot of people in discord and discussions around this topic during live streams or dev questions. I do have a personal take on this idea that I think can have actual benefits for the game in the following manners:
Location:
In-game settings under Visual/Video category would contain the option for "Enable Default Skins"
What would this setting actually do?
This would apply a Default Skin for each race (Male and female) that is within your drawing/rendering distance and prevents the equipped items, equipped transmog's and equipped skins from being rendered.
This mirrors the same concept as Wars/Sieges but is utilized in all scales and outside of Wars/Sieges in all population sizes (1, 10, 200).
Why this could be helpful?
This would have a positive impact on a players PC performance by reducing the amount of unique objects to render. Same concept being used in Wars/Sieges to allow 100's of players to more 'seamlessly' function in the same area.
It can be used to help reduce the minimum PC requirements as well by having this option enabled. This could enable the ability to target a larger gaming audience that might have older gaming systems.
The downfall would be that a person's cosmetics they have gathered in game and/or acquired through the shop/store/backings would not be visible to those players with this option enabled.
[EDIT: Corrected typo's and better wording]