I deck out all of my followers in awesome armor. Its way better than anything the blades have in stock, and they still unequip it all in preference of the blades armor.

Its as if they have to specifically be my follower, then zone to an outside area in order to be intelligent and equip the best gear in their inventories.

Any way to correct this?

They will equip the armor that gives them their best protection, given their skill set and perks.

I don't have any Blades Followers so I have not tried with them. However, after spending time with enough followers, I stopped worrying about getting them fully protected.

Followers unequip the armor you give them when you dismiss them and you (or they) leave the cell. They reequip it again when they start following you (under certain circumstances, I usually trade one piece with them and they reequip the whole set). They also occasionally get a duplicate set of their original gear as a result.

It's annoying, and probably a bug.

Blades followers are your own followers that you induct into the blades.

The gear that you give them is leagues better and they'll wear it if you choose them as a follower and they follow you, but when they are sent to meet you vs a dragon (as a 4 man squad) they show up in blades gear.

This

^^ I can confirm this, happens with Lydia too, sometimes when she waits at Breezhome she re-equips her crappy steel armor.