I know, same with all of my characters. It would be a bummer to have this be the reason why, because it is as minor as people rolling worgen then changing race just so they could have the top hat.I think I know why. My guess is that when you transferred characters to another faction, the gear look that is suppose to be faction only remained on your gear, so you could wear Alliance gear on your Horde.
To test this, somebody should try transmogrifying other Alliance only gear that changes to Horde gear when you change factions. Or vice versa.
I have never transferred factions on my priest...
If it is the case, hopefully they are working on something to fix this like making transmogrified gear become untransmogrified upon faction change.