I think its a really good idea, maybe some things can be modified, but the idea overall its pretty good.
I know that PVP its a FFA thing and usually didnt need to have rewards to "enjoy it" and be part of that subworld in the server, but just like other "subworlds" have their own rewards (i mean, u got titles talking, tamming pets, refining, breathing, dying, breathing, doing anything instead pvp), so why they cant have something like that? Sounds unfair for all those players that their main and greatest motivation to play its PVP dont have something like atleast a title.
I believe that if the GM's team gives a bit of time to this idea, can find a way to make this work and without many ways to abuse the system (i say many, bcuz ppl always find something, but be fair, they do it in almost any other content, i dont think pvp will be the first thing, assuming they find a way).
If there should be something like costumes and titles as rewards, many ppl that dont join pvp because are lazy to do it without any compensation apart from having fun would join, or atleast will give it a try, here its when u say, "ppl will just join to farm the titles/costumes and will leave", maybe its true, but if u make it hard to reach, and are exclusive hats/titles like in woe/bg, many ppl will try it constantly, i mean atleast i would try it, even if i'm not an active pvp player, if there should be some kind of reward to trying it, i would take the time to try it.
And not really sure why so many problems from getting costumes/titles from pvp, u arent going to break the game with those things, just try to avoid the farm ways, make them account/char bound and should be ok i guess.