Played the event for a bit last night. I rolled a new character and did maybe 7-8 quests. Killed a few mistwalkers.
Absolutely move the lantern to a cosmetic slot. Sucks really bad to lose gear slots just b/c you're participating in the event. This 100% needs to change. Cosmetic shield slot as Cordovan brought up sounds like the best choice if it isn't possible to just create a new slot for lanterns. Is it possible to just let us choose the slot? That'd be even better.
Make the required Hall of Heroes lantern quest shorter or let people skip it. Most people are going to just want to just grab their lanterns and go. I understand it's for story reasons which is cool but it's a little long considering its purpose. The sneak parts are interesting and I'd like to see that in a regular quest but just not here.
Felt like it took too long for mistwalkers to spawn. Should probably speed that up. In 7-8 quests I didn't see any unless I intentionally slowed down or went afk, I ran them on elite. Granted Borderlands quests and Korthos quests are short, which is what I ran, but there's gonna be a lot of quests where people don't see them if the spawn time holds true. Some people can zerg quests really really fast and there's a lot of quests in the game you can complete in say, 5 minutes or less.
I would recommend taking the latern hall of heroes teleport NPC off the veteran status boat. I teleported to the Hall of Heroes from the vet status boat with my new level 1 character immediately, realized after taking the latern port I could no longer get back to the Korthos beach to run the Grotto. Therefore I had zero gear and no weapon. People starting new characters without established characters to pass stuff through the shared bank are going to have to punch rats in their underwear to start if they also do this. Since the event requires a level 1 start anyway, just don't make it available until after the Grotto.
Also, put a teleporter back to Korthos next to the lantern NPCs in the Hall of Heroes please so level 1 characters can get back to the starter area after grabbing their lanterns, without having to run all the way there from the Hall of Heroes.