Yeah it should work the way it does in eso. Any item you've unlocked can be set as your appearance even weapons. All it costs is gold and not a super large amount of it. maybe about 20 minutes work of grinding. Or you can buy a outfit change token in the in game store but its super cheap I have a bunch given as daily logon rewards that I've never even used.
Guarantee it won't work that way though. Will probably be a sub menu like infusion that only reads current inventory because thats the easiest way to do it. I'd love an actual outfit station where all your cosmetic unlocks are stored and you could transmog your armor or change shades there without having to pull from collections.
I'd be very surprised if we can pull from collections.