The main idea behind giving the Iron Gear to the Knights in the second season is mainly to represent the team's growing strength. Plus, a battleship would be much more ideal for a Multiversal crusade against a military-like group than essentially a giant flying mobile home. However, it does maintain its status of it being used by a set of antagonists first before the heroes use it, much like the original Xabungle anime (which also acts as a way to demonstrate its power beforehand).
The Iron Gear's Full Burst is mainly based off of Dancouga's DancouCannon formation, given mainly to give the Iron Gear a "cool" finishing move other than using its "bare" hands. It also factors into Cynthia's character/abilities, with how she's able to use electonic systems however she chooses.