Now that it isn’t possible to scrap hats anymore, players can’t do anything about duplicate hats themselves. Now the devs will have to do something about these duplicates.
Like implementing the same system weapon illusions have for hats and hero skins. This would end up deleting the duplicates, but it is better than them taking up space towards the inventory limit and cluttering up your inventory.
It’s true: duplicate hats are a problem to fix… but, my personal opinion, it’s even more important avoid the last adopted solution (meltable hats)… the risk to accidentally melt an hat made, the craft system, a little bit anxiogenic 
Make hats like illusions is a good idea.
Or, we simply remove hats from Commendation Chests (CCs), since they are obtainable via the Emporium anyways, remove the dupes from inventories once and for all and give players some Shillings as compensation, and add a chance to drop Shillings for CCs or maybe even Red Dust, so ppl with bad luck on red items can upgrade this way? Just an idea, atleast it would solve the dupe problem and make CCs valuable for players who already own all those hats the CCs could drop.
Or better, give the duplicate hats for people who didn’t have the LUCK to drop them yet instead of giving free shillings for people who already have less shillings to spend (due to LUCK)