Here is how it could work:

You have four toy knights that you can add equips using the mission, and you gain presteige for adding on stuff. Completing all of them grants you more presteige than what you normally get. When you encounter the noob knights trapped in cages, they will wear the stuff you give them. They attack with the stuff you give them too. This would mean that...
-better AI would be needed for these knights
-they have to learn how to attack with guns and bombs
-they would need to appear more, such as in the Arcade and a small chance in Arenas
-armorless knights need less hp than they do now

The first knight you rescue will wear the first toy knight's stuff. The second will wear the second's, etc. and the gear works exactly as if a normal player was using them. Of course, only armors and weapons could be deposited, not shields or trinkets, or battle sprites. Any level that has only one or two knights will let you choose the toy they can wear. In a place of four possible knights, they pick the toy that you save the knights in order. The toys never wear out and are useable an infinite amount of times, so long as you see a fellow AI in need. These will not work on Mechas or on other players.

These knights can also dash with the same timer as the player. Without shields, they cannot shield bash. They can do charge attacks similar to Mechas. You can set knights to do only standerd attacks, only charge attacks, or both. You cannot set a toy with a bomb to do standerd attacks. This setting can be toggled at any time, even in battle, for no fee.

You can deposit any level of armor or weapons that you are able to wear. These bind upon being given to the toy and heat up like gears used to level up, so that you don't have to give Radiants to them. You can unbind them via Vise for half the normal unbinding price. You cangive knights 0* even if you are a Vanguard, but you only give one item per mission occurance.

Some good examples for toy knights:
Full set of 2* Demo armor and a Gravation Vortex. Very cheap, and with CTR VH once fully heated. Gather those monsters up.
Fencing Jacket and Wolver Cap and Shocking Edge. A reliable and cheap source of shock status.
Cyclops Cap and Vitasuit Plus with Status Alchemer. Ranged status that can tank a litthe bit, and very inexpensive.
Full 2* Demo and a Venom Veiler. The VV will cost you a bit if you don't have the orbs or recipes, but extremely helpful. Also works with Swagger Storm, but avoid the other mist bombs in case of status Lichens. You could also use Nitronome if you can't afford the recipes.