It's pretty simple: people want to play as characters who they are attracted to. I wouldn't even narrow that down to just physical attractiveness, it's just the most readily obvious one. Some may overlook a lack of physical attractiveness if the character's personality is appealing or if they are worth looking up to in some other way (see: the sexy women going out with the goofy looking funny guy trope).
An issue specifically with Outlaws is the questionable quality of the game. This is Ubislop, which few people are expecting to be well written. We'll probably be getting an annoying, Mary Sue girl boss. Nobody knows yet but it seems likely given recent trends (and because we've already seen her shrug off a thermal detonator explosion like it was nothing). Physical attractiveness does a lot of heavy lifting and with it removed from the equation, all that weight is now being transferred onto the shoulders of the character's writing and other traits. Most writing in media is not worth a damn any more so that's why we do often have to rely on superficiality like attractiveness to get things over the finish line of enjoyability. In movies back in the '70s Hollywood used to be able to get away with putting all sorts of mutants on screen because the films were actually decent (we just called them "character actors" back then).
There's a saying that we eat with our eyes first and that rings true when judging a character based off their looks. Until we get to the tasting, an ugly character gives an off-putting first impression. First impressions do matter a lot, and to pick an example which is actually explicitly aimed at
women, there is the famous Fabio appearing on hundreds of romance novel covers:
That image is what gets women through the door. Then if the book's any good, they fall in love with the character due to the writing. And while women want to bone him, men also want to be him - so they can bone the women
and swing a sword on top of a mountain. It's an example of how attractiveness can lead to widespread appeal.
As I said, physical attractiveness is not the be all and end all because there can be other character attributes to make up for it. But when the developer has the opportunity staring them right in the face to make the character very attractive - literally, in this case, when they have scans of the beautiful actress - going out their way to not secure such an easy slam dunk appeal to the masses is baffling. By appealing to the maximum amount of people via physical attraction, it means that even if the other traits like their personality fail to resonate, there is still something superficial to fall back on. It's a fail-safe. The girl boss pill is more easily swallowed if she at least looks good.
Why this issue has become such a big point of contention with both this game and Fable is also down to the demographics of the players. Most people who play these sorts of games continue to be straight men. Certain people won't want to admit that. A straight man will not be concerned with the sexual attractiveness of a male protagonist, because he isn't concerned with that aspect of the sex to begin with. He will be looking to other attributes to judge his worth as a character. I'm pretty sure most straight men don't want to bone Conan or Marcus Fenix but they still appeal a lot as heroic, masculine power fantasies (and I say that as a positive). A straight male player will care more about how hot a women is because that is what he's biologically destined to see as an important quality of that sex. When a man with a functioning sex drive sees a woman, where she sits on the boner binary is the first thought on his mind.
I'd also argue that attractiveness isn't nearly as subjective as it seems. The fact that 2 people can disagree on whether someone is attractive or not isn't proof of its subjectivity. To me it just shows that the person being judged maybe isn't actually so attractive as to get widespread recognition of that. If Kay Vess was attractive enough, we wouldn't be having this argument, in the way that we don't hear any widespread debate about whether or not Brad Pitt is attractive. You can always find outlier opinions but the exceptions just prove the rule.