I had Faendal revert back to his normal gear after dismissing him. I doubt it was fixed with any followers and i doubt it ever will be. I for one would rather them concentrate on other problems that really effect gameplay. I also noticed it would be silly if some of these npcs kept wearing the stuff i gave them after they returned to their normal, sometimes blue collar lives. Faendal chops wood all day and im sure some of these other followers just hangaround doing similar stuff.
It's a real easy fix code-wise, but, of course, I'd rather they fix real problems. I'm not losing sleep over it - I just wish they would wear the cooler stuff I can make and give them.

Many followers wear their armor all day (housecarls, et al) and even sleep in it (Mjoll). I just feel that as Dragonborn and baddest character in Skyrim our followers shouldn't be wearing rusted iron armor if we give them Daedric. Represent!

Edit:
They put their crappy default armor back on, just like always.
Damn it.
