I would imagine a large complication to that entails a great deal of the cosmetics from the Western side of things which were exclusive to collaborations, promotional events, and events which no longer exist. The example I can think of is the Dragon Hunter Frontier Z collaboration where I can imagine the clothes and weapons could unquestionably be given a visual upgrade alongside everything else but that I don't exactly understand how the licensing or how the lawful side of this collaboration functions where I'd wish it was as simple as Sega going through and upgrading the assets but I don't know about how much of Capcom is involved in this process.
The same is applicable to collaborations such as the Final Fantasy XIV collaboration with Odin (which still exists as far as I know) where I don't know how much of Square Enix is involved that for Sega to have the ability to upgrade assets there. If it was purely just Phantasy Star-related items (like character outfits, cameos from different games, or other Sega-related properties) I could envision this likely would have been done, or at least would be carried out. But from the Global variant we don't have the existence of Cougar NX so that I do not know if there are other complications seeing Sega's properties that might also contribute not to updating everything they can within reason.
Only improvements we'll likely see is the brand new engine improving shadows, reflections, colors, particle effects and projecting them against the outfits. You can take a look how just implementing better shadows and colours can enhance older equipment by assessing ReShade screenshots. Collabs who have had their cosmetics removed still have their assets exist on the game so those will probably still be accessible for jp players. Only improvements we'll probably see is the brand new engine improving shadows, reflections, colors, particle effects and casting them from the outfits. You may take a look how exactly implementing better shadows and colors can improve old equipment by assessing ReShade screenshots.