The vest thing could be tied to the halves of the Power sword. Maybe the sword of Grayskull was lost and the vest was the only way to have He-man. Kind of like what the Horsemen envisioned with the new techno sword. The Sorceress could have made the illusion for the physical appearance of He-man.
Keldor was a mage too. Read the MvC comics and you'll know what I mean.