The Mandalorian was also an interesting case where they almost had to use a solution like on-set LED screens due to the reflectivity of his armor.

Yeah, from what I saw they originally took the plunge to build the ‘tank’ due to the armour but ended up using it for almost everything because it was so flexible and convenient.

At that point, I wonder if it would have been easier to use motion capture and insert the actor's armor, helmet etc. via CGI too?

Then you have to also model all the other actors and the entire rest of the scene, including practical effects. Otherwise you get Phantom Menace style 3D visuals with close-enough cube maps that end up looking very game-y.