Here is a list of things I found regarding the current pet system, and how I would improve them. I was hoping some of those systems would be ironed out from MO1 already, but they seem to be mostly the same.
- pet feeding and loyalty: let's start from this statement: pet feeding and loyalty are just a gimmick! a tiny minuscole chore that doesn't add much in term of gameplay. here is how you deal with this minuscule chore, before you use your pet for any active (and fun) gameplay activity: you cook one leaf of any vegetable your pet eats into a metric ton of water, you force-feed it on your pet and then you afk, waiting your loyalty to go up, while you happily browse questionable pornography on the internet. I get it that your character has to eat (another gimmick), so you want to have pets needing food as well. however, if you want to keep a semi-useless pet feeding system, at least iron out those inconsistencies. for instance, you could increase the amount of "fullness" raw ingredients give, and prevent the water dilution.
regarding loyalty, here is a well-established game development fact: any gameplay activity that requires the player to afk in order to obtain anything is bad design! With this in mind, the way loyalty works at the moment falls exactly into this explanation. While i would personally remove loyalty altogether (a relic from UO which, as stated before, serves no practical gameplay purpose in reality), I can also offer a more moderate solution: make loyalty grow when you also ride your horse, the actual activity that makes horses and their owners bond together. not only when your pet sits in front of your afk character.
- pet levels and taming: This system shares many flaws with the feeding/loyalty.mostly, the fact that leveling a pet from 100 to 125 takes 12.5 hours of afk (not too bad if you use a macro for auto-feed I guess, but again not very enticing gameplay), adn the fact that, in an hardcore game, any semi-competitive player always goes for min-max. The addition of the pokemon breeder-style training at the equerry was actually a welcome addition, but was leading to some quite obnoxious loops: before going to bed in the eveing, let the pet to level up at the equerry; wake up in the morning, put the pet to level up; come back from work, put the pet to level up. This could be improved by simply adding the option of asking the equerry how many levels you want to level up your pet: the more levels you want, the more time will take and the more money you spend . having to check the equerry every X hours is just redundant and annoying, much like a farming simulator.
My proposed solution for the afk pet leveling (which is not just annoying, but also boring and un-engaging): make pets lvl 100-125 only available in the wild, and very hard to tame. this system has multiple advantages and no disadvantages, except maybe annoying few carebears affecionados of afk leveling while surrounded by guards.
A) it ties very well with the current system of baby/regular/alpha animals found in spawns. alpha animals could be the ones above lvl 100
B) doesn't destroy the market as bad, as the value of a 125 pet doesn't come from the afk time spent on it (like for instance metal refining), but from its rarity itself, and the risks associated with taming in the wild
C) adds a bit more depth to the tamer "profession", which oterwise would be quite flat and boring (especially if breeding will be implemented). This can even improve if taming alpha animals would specifically require exceptional skills, certain extra items, special conditions, or all of the above. for aggressive animals, they might be fist beaten to submission (see below).
- mercy mode for taming: a couple of months ago, I didn't fully understand why wild anymals would go into mercy mode as well, like players. with taming now implemented (though only on horses) I though this could be needed for when someone wants to tame animals that run away (like pigs or springboks). Not sure if this was the intended purpose, or just a glitch, but I think it can be effectively used for taming (even for aggressive animals, see above).
- pet flag: now sure if this is a problem with the reputation system or a bug, but for now it seems that a pet does not share your "flag", and everyone is able to attack it in town with no consequences. not sure if the imperial law changed, but I think attacking a tamed pet in town should be still considered a crime. disclaimer: when I tested this I had a quite buggy horse, so it could have been just a bug and not a general rule.
- ridable terrorbirds: this feature has beed vocally requested by me by the whole community for more than a decade now. please implement ASAP! 
- implement the old molva model: the one from one of the very first MO1 pre-alpha videos (i cannot find it), in which there was this super-chonky beast that would require to ride it lying down.
- pet feeding and loyalty: let's start from this statement: pet feeding and loyalty are just a gimmick! a tiny minuscole chore that doesn't add much in term of gameplay. here is how you deal with this minuscule chore, before you use your pet for any active (and fun) gameplay activity: you cook one leaf of any vegetable your pet eats into a metric ton of water, you force-feed it on your pet and then you afk, waiting your loyalty to go up, while you happily browse questionable pornography on the internet. I get it that your character has to eat (another gimmick), so you want to have pets needing food as well. however, if you want to keep a semi-useless pet feeding system, at least iron out those inconsistencies. for instance, you could increase the amount of "fullness" raw ingredients give, and prevent the water dilution.
regarding loyalty, here is a well-established game development fact: any gameplay activity that requires the player to afk in order to obtain anything is bad design! With this in mind, the way loyalty works at the moment falls exactly into this explanation. While i would personally remove loyalty altogether (a relic from UO which, as stated before, serves no practical gameplay purpose in reality), I can also offer a more moderate solution: make loyalty grow when you also ride your horse, the actual activity that makes horses and their owners bond together. not only when your pet sits in front of your afk character.
- pet levels and taming: This system shares many flaws with the feeding/loyalty.mostly, the fact that leveling a pet from 100 to 125 takes 12.5 hours of afk (not too bad if you use a macro for auto-feed I guess, but again not very enticing gameplay), adn the fact that, in an hardcore game, any semi-competitive player always goes for min-max. The addition of the pokemon breeder-style training at the equerry was actually a welcome addition, but was leading to some quite obnoxious loops: before going to bed in the eveing, let the pet to level up at the equerry; wake up in the morning, put the pet to level up; come back from work, put the pet to level up. This could be improved by simply adding the option of asking the equerry how many levels you want to level up your pet: the more levels you want, the more time will take and the more money you spend . having to check the equerry every X hours is just redundant and annoying, much like a farming simulator.
My proposed solution for the afk pet leveling (which is not just annoying, but also boring and un-engaging): make pets lvl 100-125 only available in the wild, and very hard to tame. this system has multiple advantages and no disadvantages, except maybe annoying few carebears affecionados of afk leveling while surrounded by guards.
A) it ties very well with the current system of baby/regular/alpha animals found in spawns. alpha animals could be the ones above lvl 100
B) doesn't destroy the market as bad, as the value of a 125 pet doesn't come from the afk time spent on it (like for instance metal refining), but from its rarity itself, and the risks associated with taming in the wild
C) adds a bit more depth to the tamer "profession", which oterwise would be quite flat and boring (especially if breeding will be implemented). This can even improve if taming alpha animals would specifically require exceptional skills, certain extra items, special conditions, or all of the above. for aggressive animals, they might be fist beaten to submission (see below).
- mercy mode for taming: a couple of months ago, I didn't fully understand why wild anymals would go into mercy mode as well, like players. with taming now implemented (though only on horses) I though this could be needed for when someone wants to tame animals that run away (like pigs or springboks). Not sure if this was the intended purpose, or just a glitch, but I think it can be effectively used for taming (even for aggressive animals, see above).
- pet flag: now sure if this is a problem with the reputation system or a bug, but for now it seems that a pet does not share your "flag", and everyone is able to attack it in town with no consequences. not sure if the imperial law changed, but I think attacking a tamed pet in town should be still considered a crime. disclaimer: when I tested this I had a quite buggy horse, so it could have been just a bug and not a general rule.
- ridable terrorbirds: this feature has beed vocally requested
- implement the old molva model: the one from one of the very first MO1 pre-alpha videos (i cannot find it), in which there was this super-chonky beast that would require to ride it lying down.
