Think about it, when have you ever played any kind of game or RPG where all the character creation does is change the player's appearance? I do get some people like that but I've noticed a very consistent pattern of more customisation options usually means the devs have spent too much time on that rather than the gameplay and story.
There's also the other factor of these little background tag stories they try to introduce like with religion or lifepaths. They gives you the impression this is suppose to be some kind of meaningful choice but in reality all it does is change a few dialogue responses and has very little effect on the main story itself. It feels like there are certain mechanics I see regularly getting shoehorned into genres that don't belong in it and they're meant for a certain type of person that isn't really that interested in gameplay and more interested in cosmetics and general customisation.
I consider it to be a feature because i like fucking around in that shit.
Back in the day I would somewhat enjoy that, but when you realise it's all completely cosmetic and there's zero impact on gameplay it feels like a waste of time for me as a gamer unless you actually care that much. I mean in Fallout 4 for example it was something of a meme to create the most fugly character imaginable. It's all in your head though, because the characters don't react at all and this is the case even with the story background tags RPG games sometimes have.
It's more about immersion and allowing players to add a little bit of extra veneer to the story they want to experience. And I wouldn't entirely discount the impact of this from the player's perspective.
That said, the extent to which customization needs to be offered to achieve an appropriate level of benefit can vary. In Pathfinder: Kingmaker for example custom character portraits and a basic level of customization for the 3D model was absolutely sufficient. In the Avernum series, pretty much the same deal (though that didn't have built-in support for custom portraits).
In something like Skyrim though, where the level of visual detail and interaction in the world is pretty high, I'd have the same level of expectation for what I can do with character visuals. And then of course there's games where I'm perfectly fine with playing a pre-set character or a "no-name" character in general, like in the STALKER series, Half-Life, Dishonored, etc.
It all depends on the kind of game experience you're aiming to create and what kind of story you're trying to tell.
Interesting thought experiment to make the customization actually affect the gameplay in various ways.
Would be funny to see NPCs start reacting to those "MAX every slider to make a hideous character" types in horror & revulsion. Although unlikely to happen since developers would rarely want to gate content or acknowledge that those essential "character creation" type features actually are deeply relevant to how you interact with the world.