It's no secret that players are annoyed by the server processing and downloading times.
I think the "avatar loading" should take place in the menu, not sticking you in a blue diamond avatar to wait for it to load.
Goal:
Quickest and fastest transition between two avatars
Fix:
When you hover over an avatar, if it is not preloaded, it will reveal a button that says "Preload Avatar".
When you click on "Preload Avatar" it will do all the downloading and processing without switching your avatar, and show a "loading animation".
When it is ready, you can now click on the avatar again to switch to it, or it will automatically switch after it has finished preloading.
This is basically moving the "loading bar" from being "above the blue diamond avatar" to being in your UI menu instead.
If an avatar is already preloaded, then switching an avatar works instantly like it always did.