I've wanted to do something like this for ages, but I always seem to over think the process. I've gone for something like, or at least close to, the original G1 versions of the Head Master Nebulan companions. Minimal articulation transforming into a boxy head shape.
It actually has a little more articulation, thanks to the knee design accommodating a swivel as part of the transformation.
Version 2 has a little more armour on the robot front, to give it a bulkier profile.
Not sure if I'm going to go as far as a full Head Master robot (such as fort max or scorponox) but this is a reasonable (but IMO not fantastic) start.
As ever constructive comments welcome, good or bad, spam will be deleted.
I've been playing with the detail to create a third version (the one in green). It is slightly thicker in the body which means there are more holes in the folded up form, but the robot mode looks a little more solid.
if anyone is asking "well how would it connect to a body?", the "face" of the robot mode is a single 1x1 stud, with the female side facing out, it could therefore connect to any stud with the male part facing up. I'll play around with some designs and demonstrate what I mean in a future moc.