That's not the case apparently, so far yes, you need to keep a copy of the gear you want to have an appearance of
That is a... huge disappointment.
Just have us unlock a catalogue of appearances as we find items, and we have all the choice in the world what we want or might not want to use. Problem solved.
Honestly: I think there is a reason the Big Ones doing it this way. I bet Ubisoft has invested a lot of money to research how they want transmog to work in their big titles. Assassins' Creed does it pretty well. You find it, you can use it. I think that is even how the absolute majority of those systems work.
In a game that is already very item-heavy, adding the requirement to not only keep track of the items you want to use, especially for people who also want ti micromanage when they wear what, but you also need to track and keep those that you think are not helpful for your current party, but might want to use the appe...