Why was this never released in the west? Could it still be?
Unlikely. This is way too old, majority of people that actually cared, already joined japanese servers, thanks to robust english patch that is regularly updated. And they aren't going to migrate to english servers that will be like 6 years behind in terms of content.
While licensing issue for cosmetics is not unsolvable, I don't see it being worth it for SEGA to do so in the first place. And removing it all together knee-caps their monetisation opportunities, as cosmetic gacha is pretty much how this game makes money.
TBH PSo2 has plenty of problems, from EQ schedules spread out ove rdifferent times of days, to meta being "spam PAs" with a lot of actual in-game mechanics for dodging and combos and such, really only being utilized briefly in some high tier encounters.
But damn did it get true end game right. Fashion. Hundreds of different pieces of clothes and the fact that playres resell what they get from gacha at player store means you can just go and buy what you want with in-game currency. Sure, most desireable shiniest pieces will cost 11-12 digit numbers, but there's still hundreds of items sitting within "comfortably affordable". I feel like OP understates just how on point your ability to express your character is. You are severly unlikely to see two characters looking even remotely the same... just... dont' expect them to also look consistent in terms of art style >_>