These things for me feel mutually exclusive.
I've touched in the past how the whole degradation thing really stops being a meaningful aspect of the whole pet system in very short order. Eventually becoming little more than a general inconvenience that makes it far more continent to run Sentinels than it does Kavats/Kubrows.
Now with Pet decorations and toys I want to be able to leave my Kavat out and let her run around the Orbiter but I really don't feel like I can. Which kinda puts P
Actually just went to make breakfast and thought about how something like that might work as well as fit into the game progression and lore.
So when you go to Cetus and talk to the pet dude if you have a companion equipped it will bring up an extra prompt.
If you only have the first Incubation Module he will comment on how your pet doesn't look so good, maybe cover the fact that they don't have any problem with Degradation and tell you that he wishes he could help but they currently