Or simpler, just put an infusion option on old gear that only level 40s can access.
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They will most likely do this in a paid dlc to entice players back.
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Yea this could work. What about white, green and blue's?
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I'd leave them behind to keep the forward progression feel to your gear, even though some of the gear is awesome looking, the perks are usually never the best.
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In other games transmog disregards perks on the gear used for aesthetics. Say you had raid gear on. Your passive perks would still be whatever the raid gear has. But your character would be seen with all the gear you have transmoged.