@wolfmanbush yep, I don't think that a lot of people actually realize that it is a thing that happens overall, but it is for sure a thing to reduce strain that the assortment of models causes. I forget what the threshold is set to, but after a certain point the game will start making swaps to what I assume are the least stressful models for any given treasure that has multiple variants.
Cause in a lot of cases, a crew is already surrounded by a load of different models before loot even comes into play. If you're on an island you have all those assorted rocks, foliage, trees, barrel varieties, debris, and so on (and Outposts expand this significantly). Not to mention your Pirate, the Pirates of your crew if you have one, and all of your visible personal cosmetics. On the Ship your are still likewise surrounded by loads of models before Loot, as you have flags, masts, lanterns, harpoons, assorted tables, shelves, cook stations, vanity chests, wheel, etc.
Add Loot on top of all of this for a big swath of addition models, then add in another Ship or two in a conflict and you start to realize that this game actually by the very design of it putting a lot of assets into play at almost all times. Throw in all the assorted calculations that also need to be processed in any given situation to have things behave properly and it starts to become obvious why we have so many issues going on.
So, we have model culling procedures in place to help reduce this strain when certain thresholds are met in order to help the game keep being functional while also not spoiling the ability for players to essentially do whatever they like (such as hoarding obscene amounts of Loot on their Ships and rolling around engaging with anything and everything they can, include conflicts with other players).