I agree with all of it, OP.
I was VERY disappointed to find that the covenant system would be gameplay-related and not merely cosmetic.
I think the covenant system should be about gaining access to a faction and closing access to the others. That faction should mean mounts, mogs, and perhaps a dungeon only accessible by members of that covenant (which would mean making friends with people from your own covenant and be a serious boon to community IF we still had closed servers and could actually see the same people more than once in instanced content).
I was hoping for racial passive-type perks from covenants…but no, it’s gonna be like everything else. There will be a “right” covenant and three “wrong” covenants, and nobody’s gonna get to enjoy having the RP choice unless it’s an alt that doesn’t raid or M+ and only exists in the game for farming or casual fun.