Whether you can conceal a weapon or not is not a game mechanic. It has no bearing on how powerful your character is in combat. Outside of combat if you think this might impact a game a lot, I can see the DM not allowing the reskin. Not a problem. But the act of making a dagger appear like a fullblade or vice versa does not make the character more powerful as far as game mechanics are concerned.
Don't see a problem with subbing halfling mechanics for a gnome barbarian. Size however *is* a game mechanic, so if a player tried to reskin a gnome as a half-orc, but still benefit from a goblin totem dagger, that would be breaking the rules. half-orcs are not "small".
It's understandable that you hate it because, the latter example you provide is breaking the rules, and not reskinning. The former example is reskinning.
Basically all I'm trying to say is you can't reskin "half" an item and gain benefit of two rules that were not meant to be used together. If you're reskinning, you go all the way. It's probably a good idea to reskin things that are already close together, instead of far apart on the spectrum of things. For instance my first example of fullblade vs dagger was a poor example because it replaces a two handed heavy weapon with a one handed off-hand light blade. Too many changes. A better example would be say someone in love with Drizzt wants to play a drow with two scimitars. But they don't like the scimitar mechanic, they want bastard swords, but they want the bastard swords to look smaller and curved. The change is nothing but cosmetic. On your character sheet you have a pair of bastard swords. You have the relevant feats for a bastard sword. In your character description, it says your character wields a pair of curved swords. It is merely a cosmetic change.
The best examples of reskinning are probably things you can't otherwise accomplish but need a mechanic for. Say in a campaign I want to use light sabers and laser pistols. So I reskin every light saber as "melee weapon of your choice" and every laser pistol as "ranged weapon of your choice". SO on your character sheet you might have a doublesword, and a longbow. In your character description, you carry a double ended light saber and a blaster. Rules stayed the same, descriptions changed.
An earlier example given was with races. Say in an post apocalyptic earth based campaign, you want the PC's to be Human, because it's a war of one race against many invaders. But you don't want to lose all the options that different races provide for game mechanical flavor. So you make humans from the Alps use Goliath stats, Humans from the Amazons use elf stats, and humans from Scandinavia use Dwarf stats. A player comes up to you and says I want my human to use Tiefling stats, can I be from the Sahara? You quickly make some notes and say yup.
Reskinning is not about gaining a mechanical benefit by bending or breaking a rule somewhere. It's about bringing a vision into play.
