I broke my contribution down into two posts so that ot was not a single monstrous wall of text.
PART 2: SUGGESTING POTENTIAL SOLUTIONS
Other members such as @CodeMage have already offered potential solutions to the issue, and I shall now present three other ones of my own.
1) Have Armor Display Stands count towards the Follower Limit.
Tag the hypothetical Armor Display Stands as a follower, even though they would not be of course, and have them count towards the follower limit. In the event that the limit were ever actually introduced, I personally would happily drop back to 90 thralls and pets if it meant I could have 10 armor stands. Do not ruminate over the numbers here as they are only examples, instead focus on the concept. I would also add that as armor stands dont have AI or other functionality outside of their intended purpose, server performance may actually improve somewhat for each thrall substituted with an armor stand.
2) Make them only accessible via the Admin Panel.
I have suggested this one before and it was not especially well recieved, however I shall restate it for the purpose of compiling a complete list here. Add the Armor Stands to the Admin Panel, then users on private servers and singleplayers can still use and enjoy them. While people on officials would miss out, it comes back to agency. If people on officials still want to use them, they may start a secondary singleplayer game or make the move to a private server. (least desirable solution, but just putting it out there)
3) Make Armor Display Statues instead:
A different concept I devised entirely, and I shall do my best to explain it here so bear with me. An Armor Display Stand is a storage device of sorts which holds and displays 5 pieces of changeable armor. An Armor Display Statue however is different. Instead visualise either the ‘statue of Ymir’ crafted at his altar, or the ’ Khitan Legionary’, or ‘statue of conan’ from the Riddles of Steel DLC. Now conceptualuse a stone, wooden or steel statue the size if a thrall which has a matching set of base armor as its model (for example, a full matching set of standard heavy armor, or a full set of vanir fur armor), however the 5 armor pieces are purely cosmetic and not interchangeable. So hence the Armor Display ‘Statue’ is in the sense a placeable (ie-does not hold items or alter its appearance) just like the aforementioned Ymir and Conan ones, and as such has no inventory or ‘moving’ parts. While I am sure this would destroy many peoples dreams of combining a set of fluorescent yellow coarse leggings with a bright pink silent leigon pauldron, this may or may not be as good as it gets. And I would sooner take matching sets on a Statue than nothing at all. Just some food for thought. I am happy to further explain this concept if it is still a bit unclear to anyone.
4) Already covered. See CodeMages great idea listed above in Post no.17.