I guess that getting bald and his helmet is part of his transformation. They're still all proto-villains and haven't been fully developed yet.
But I do wonder what they're doing with Jerome. If DC is as restrictive with their characters, as the rumors around the Arrowverse shows suggest, then they obviously won't ever turn him into the Joker.
I think Jerome will end up being the real Joker.
He doesn't work as a red herring. Red herrings are supposed to be subtle, while Jerome was just too 'in-your-face' and direct. Remember the comedian at Fish Mooney's bar at the beginning of the series? That was a good red herring. But Jerome's character was anything but subtle.
I believe that the producers talked about "introducing red herrings" because they knew the Joker was such an important and central character, that if they somehow screwed up his introduction they could always fall back to "that was a red herring".
However with Jerome they knocked it out of the park. The character was great, the actor was great, and it had almost universal praise from fans.
This is the reason we saw Jerome's body in Strange's preservation capsules. If Jerome was truly and completely out of the series and "only his legacy remained", then why show his body in the "revival line" at Indian Hill? I think the producers and writers recognize that they may have something with Jerome that fans liked, and that introducing him as the early Joker may actually work, and that's why we got the hint of a future revival. Red herrings are never this direct and persistent.
Jerome's death also makes sense when it comes to his potential future as the Joker. That would be the reason the Joker's identity is a mystery in the future, as no one would believe Jerome came back from the dead. Everyone would believe the Joker may be a completely different person, or a copycat of that crazy kid with the maniac laughter.
His legacy as a corrupting force in Gotham with the whole laughter thing can still happen, and then Jerome can come back in the future to assume his role.
I know tons of comic book fans do not like the idea of the Joker having an origin, and they stick with the "his origins must always remain a mystery", but Gotham is an alternate continuity, and different take on the Batman mythos. We already have different origins and stories for other villains, even Firefly seems to be a girl now.
Gotham is currently my favorite live action show on TV, and probably my favorite live action Batman version, even above the movies. And it doesn't even have Batman in it. Jerome blew my mind away, and I eagerly await his return.