MMO just mean massively multiplayer(multiuser) online. I have seen mmo shooting games that weren't necessarily rpgs. Zelda could work as an online game. I would prefer it to be a big turf war game though, not a damn wait around for the monster to appear for 4 hours so it can drop an unusual rare item type game.
If I were to do it: Has anyone played Assassins Creed black flag? Well if anyone remembers the fortress raids, they were pretty cool. You basically in single player found this fortress, boarded from your ship, you and your pirate buddies invaded and took out all the captains. Eventually you could take on the boss of the fortress and once defeated you assumed ownership.
At that point you had control of it. There was some ability to add taverns and such, but it could have been a cooler
more expanded thing. It would be pretty cool if each fortress had an accompanying city to control. The fortress would be one part manual person defense, one part automated tower defense.
Now imagine a world where you can make a faction of 64 players broken up into teams of 4-8. Imagine if the world had like 15(not 16) big fortresses. The goal of the game would be to take control of the majority of the fortresses in the world. There may be several worlds in which you could travel between.
I'd imagine keeping character upgrading on the simple side could be done. Once you die you lose all your items and money, unless you store it somewhere. There would be armor, but your armor and swords would wear out after a while. I'd imagine I'd want to only put a few levels of armor or swords in the game.
The field would be filled with enemies, there would be dungeons for earning certain items just like in single player. Maybe dungeons reset every few hours or something? If someone has the key you need..you have to kill them to get it. Or possibly buy the key for a hefty price in the market as a loophole. Going through the dungeon could be Indiana Jones like because you're not the only one seeking a prize. There could be coin dungeons too. Or the endless hole type dungeons as well.