The amount of data transfer needed for each such increase grows exponentially per every category added. Let's say the base data for your character takes X. And when you're in Kugane, that X is sent to all the players who can see you. Now it's X+1. So to begin with, you get (X+1) * N people who see you. That's already N data more than before.
But here's the catch, YOU see THEM, too. So for each of those N people, YOU get that +1 piece of data as well, so that's 2N total extra data already.
But this ratio is true for everyone around you. And soon enough you get a lot of extra data piling up.

What they can and should do, and have done so in the past, is not to create new categories but to bake the possible combinations into the existing categories. For instance, fem-Miqo's have the old Y'shlota hairstyle twice - once with golden beads, another with silver beads. The hairstyles that have a hairbow are duplicated, every time with the bow in different colors.
Unless they made it so that adding even another combination to face options would somehow double the space needed to save that data (actually possible, depending on implementation...) that sounds like a good solution, at least in theory. Them not doing it after all this time makes me think that they did design it in a way that would bloat data if they so much as sneeze at it...