I don’t think the question was between cycle and legacy, but between HC and SC.
The OP is stating that if a HC character dies, he might become unable to use his gear if the ranks haven’t been unlocked in SC.
I never tested it as I don’t replay dead characters, but if it is true that is a very valid point, and a good suggestion to solve it (changing the requirement to 1 for equipped items).
That, or better, just make a proper HC mode and avoid these problems entirely.
I don’t know either because there is effectively no difference between an HC character and a SC character with the “Deathless” tag, so I don’t see any point. This on top of me not liking HC mode as well.
But honestly, if your HC character dies and you go to SC, you should just keep the highest rank.
Or better… remove this absolutely senseless limitation on wearing those items?
There has never been and still is not a singular viable reason to date about limiting the usage of cross-faction items. There is a valid - and already implemented - reason to remove it from trade, which is fine… the faction tag on top of arbitrary and detrimental.
This would mean the optimal way of playing the game would be to max both factions and switch between them. Use the MG to gear yourself and then farm as CoF, which would feel clunky and necessitate all that extra grinding. Though, perhaps you could make the argument that if you’re willing to farm double the reputation you might deserve a reward.
Though you probably wouldn’t want to farm as CoF a lot of the time if you’re selling things on the MG and drops are faction gated for selling… Curious to have this conversation.
sigh… I get this comment every time when it’s brought up.
I’ll answer it first simply and then get into detail.
So the simple answer: wrong.
The detailed one is a bit more intricate and needs to dismantle the systems a bit.
Both factions have a benefit for using them, a currency to limit it and a reward combined from those two.
The benefit of MG is access to the market, simple as that.
The benefit of CoF is increased drop rate and targeted farming.
The currency generally is Favor, with the usage itself for MG being tied to gold (which is a disaster plainly spoken as it has detrimental outcomes, it needs to be a unique currency solely for trading, but that’s another topic in itself).
The rewards for MG are the bought items.
The rewards for CoF are the extra drops.
So, we already have a limiter in terms of faction usage by currency. More favor equals more usage. No favor means no usage.
Favor is directly tied to time investment. Hence more time invested more rewards as a outcome.
This means it’s already limited in itself. Go CoF first? Ok, you get your basic outfit fairly quickly, it’s directly aligned with the content you run and just increases the rate of items you get.
MG first? You get access to items swiftly, even providing access to some you can’t even get in the game before tapering off into nonsensical waiting times.
MG itself has a myriad of persisting issues still there, I’ve also provided a overview of the state in 1.0 here if you’re interested to read through it:
The crux of the whole situation is that favor limits your usage of each system, hence if you dual-system them you’ll get less from both.
Also gold is a limiter in MG, and since you can’t get gold in needed quantities through CoF gameplay without selling items it’ll lead to you lacking the possible usage of the market in the first place.
As a third - and most important aspect - the usage limitation itself poses no function at all currently. We have a system in place for ‘non tradable’ tagging, meaning that you can’t sell items dropped during CoF usage at all, hence removing you from partaking in MGs market.
Overall… if you go CoF first you can’t buy equipment from MG.
If you go MG first you scuff yourself in CoF and get barely any returns.
If you max out both you still can’t partake in the market reliably.
To optimize that and 100% remove any possible reasoning EHG should remove gold usage from MG and instead use a special currency gained only during MG alignment, which would also be net-positive for Lightless Arbor usage which has been made useless through it.
Favor usage itself is also another issue, acquisition rate versus spending rate and inconsistencies related to item cost on the market. Also we’re lacking a taxation system (natural resource sink) and listing costs as a market limiter are a worse choice then limiting it by max listing amounts. Also rising favor costs related to gold costs is a basically mandatory but missed aspect, ensuring that expensive items need extensive time investment while also demolishing RMT usage as a auxiliary behavior from doing that.
Much of the benefit of CoF is from its innate/passive effects from the ranks themselves. Favour is not the only factor.
You can still use Merchant’s Guild and sell items you’ve dropped as MG and then switch to CoF once you’re nicely geared/flush with gold to reap the benefits of those powerful rank passives to increase the chances of a viable drop, and to farm gear for alts.
But I do agree, it’s not THAT much of an incentive to repeatedly switch between as if you’re hard farming high LP/rare drops you’re likely best off sticking to MG.
You’re mismatching those terms.
I used ‘benefits’ and ‘rewards’ very distinctive for a reason there.
Benefits are what you get for being aligned with something. In other examples… a benefit in a company might be that you get bonuses for putting in a good result. The benefit for knowing a wealthy person might be that you’re financially secure as they’ll bail you out of bad situations.
If you stop the alignment a benefit vanishes. Not a worker at the company? No more bonuses for good work. Burning the bridge behind the wealthy person? No more financial security.
The reward is something different. Rewards are what you get as the result of the benefits. In our examples the money paid out for providing good work. Being bailed out of a debt with the wealthy person, allowing more mistakes in life to be made.
Now… in LE the benefit is the mechanics, hence the improved drop rates or the access to the market. The rewards are the outcomes. Hence the drops from CoF or the bought items from MG.
Do you take away the already paid out bonuses of a worker when he quits? Does the wealthy person demand back his present after you’ve pissed them off? No.
And even if yes… it doesn’t hold up to any scrutiny. The outcomes from benefits are something you can never take away, hence why they’re called distinctly ‘rewards’.
In LE we have exactly that situation though, and that’s a mess.
Actually, that would be a reward. A benefit would be health insurance provided by the company, no strings attached.
The bonus system is the benefit, the payment is the reward.
There is, you just don’t like it. The two are not the same.
Which one? The double-dipping which isn’t existing?
I heard no other viable reason for it.
And even if we have it the solutions for that are not only simple but overall positive, like the scaling favor prices or the alternative currency instead of gold.
You can use CoF to farm Runes and Glyphs, usable by both MG and CoF characters. I was CoF in 1.0, so I’ll see how well you can get them in MG in 1.1.
That seems like a colossal waste of time.
CoF has no use for Gold, so there’s no point in starting MG and only going to sell. And you cannot buy gear in MG and then switch to CoF, because the bought gear gets tagged as MG-only.
Yes? And?
MG gives more gold.
So we have CoF for glyphs/runes and MG for Gold.
Both of those have different use-cases, with the gold from MG you can increase the amount of drops in Lightless Arbor (senseless to do since MG itself is a better use, but you can) and with the runes/glyphs you could theoretically craft more items in MG (senseless to use as well since you won’t lack runes/glyphs in MG but bases).
So they’re at best fringe uses.
All those ‘upsides’ mentioned are vastly less useful and barely even thought about and hardly exploitable in a meaningful way. Yeah, miniscule double-dipping exists.
Is that miniscule double-dipping even remotely on the same level as the downside of being locked into a faction permanently or loosing the progress through the derived rewards though?
Nah, they’re not.
And to date outside of some obscure fringe-cases nothing clear-cut was said.
That’s why I’m pushing so hard there, it’s the PoE ‘but we can’t have automatic trading since the whole game will immediately immolate and blaze down in a fiery inferno!’ argument again. And with their setup that upholds a lot better then what we have here as a situation. It won’t even make a dent. You have to go out of your way to even make it work somewhat.
And that means there is a reason for playing both factions.
You’re telling me, that in a faction where I can literally buy a base from the bazaar, I won’t have enough bases? 
Going back to the topic…
This.
If the character dying means you only switch to softcore league, there’s no reason to lose access to the equipped items you found during HC, or to the benefits you already earned with said character.
Yes 
As you said, you haven’t tried out MG yet. Base-prices get wild. 2,5 million for a single item? The norm with more rare affixes.
In the cycle it might become less, happened in 1.0 as well, so it might be quite different depending on how it turns out.
But getting gold isn’t all too easy, the prices are adjusted according to ‘how much can I squeeze out from others’ before it doesn’t guarantee a decently swift sale anymore, with some lucky utterly wrongly prices items in-between.
So yes, you’ll lack bases, the amount of sheer bases which I could craft in CoF, even during the short time I used it was insane. I dropped double exalted items like candy, I had a whole tab of those.
During the leftover time of playing MG up I dropped… 7 double exalted items total.
The difference is vast.
Let’s just say that using a cycle where gold trading bots skewed the pricing as a basis for an argument isn’t a very good idea 
But I’m pretty sure that I don’t need a vast amount of bases either.
Build planning normally doesn’t even count on double exalted happening, and I’m not looking to create some kind of ultimate best in slot character, so that is a moot point.
It stayed ‘off cycle’ as well and persisted in Legacy. So I’m taking my info from there. Actually the prices in Legacy are vastly higher then they ever were in cycle given that everyone migrated automatically into the cycle from PoE because they’re used to it.
So that’s another thing to be unsure about.
Why do you care about a big amount of glyphs/runes then? 
It showcases the difference in drop rates. CoF plainly spoken is utterly insane in drop-rates. MG works on 0,7 times the 0.9 rate, which is ok but definitely not much.
And?
I am aware that Cycle 1.0 merged into Legacy. Which means, using Legacy as your basis has the same issue
I never said I need a big amount of glyphs/runes either
As for why, because until I started doing prophecies for them, I always had close to zero.
I’m not very interested in drop rates, but assuming your numbers are correct, 63% of CoF drop rates? Doesn’t sound like “utterly insane”.
But I think you’re forgetting that in CoF, you are farming alone. In MG, I am farming with the other 10 000+ players in my league.