It's fun. It adds something little extra.
More like it detracts from fun and adds a lot of incoherent nonsense that completely breaks any sense of immersion the game's managed to build.
I've seen some great customs. I've seen a zombie Akira in samurai garb, for example. I've seen characters clad like mafiosos in a way that realy works. I've seen the occasional Soul Calibur character reimagined as something different but still fitting into the setting, something with a strong concept.
These have been a small, vanishingly small handful of actually amazing, tasteful customs that have been done. I've also seen Shaq Fu and Captain James T. Kirk of Starship Enterprise in historically themed swordfighting game. And these were actually well put together pieces, just completely unfitting in the context they'd been put in.
Sadly, most customs aren't even that good. They're not just out of place pieces.
The overwhelming majority of custom costumes consist of throwing every glowing blinking accessory under the sun onto the character to the effect where they pretty much look like neon diarrhea. In the VF case, they look like someone blindly raided a wardrobe, took as many bling accessories as they could and strapped an irritating moe-bot on their back because the eye-murder just wasn't enough.
Customs are a beautiful idea, but suffer from a mass of people with no taste or sense of appropriate style.
