Query Custom Post Type by Taxonomy

Use get_terms() with child_of (accepts numerical ID of parent term) argument to retrieve child terms and then loop through them and on each iteration use current term in the loop.

Code example (not tested):

$child_terms = get_terms( array( 'child_of' => $cameras_term_id ) );

foreach( $child_terms as $term ) {

    $args = array(
        'post_type'=> 'rental_gear',
        'type'    => $term->term_slug,
        'order'    => 'ASC',
        'posts_per_page' => '-1'
    );              

    $the_query = new WP_Query( $args );
    if($the_query->have_posts() ) : while ( $the_query->have_posts() ) : $the_query->the_post(); 
        ?><li class="equip-li"><a href="https://wordpress.stackexchange.com/questions/69429/<?php the_permalink(); ?>">&rsaquo; <?php the_title(); ?></a></li>  
    <?php endwhile; endif; wp_reset_postdata(); ?>

}