Where is that feature located, anyway? I haven't finished the game yet; put about 30 hours into it on PS3/Vita, basically finishing the vanilla WO3 content plus the extra stuff added to that storyline, and have been waiting for the PS4 version to continue playing. Do you have to beat some of the newer content, added from Hyper and for Ultimate, before color edit becomes available, or did I miss it somewhere?
I don't know where it's found, but I believe that you do have to beat the new story mode to unlock it.
Ah yes, from the Koei wiki
"A Samurai Warriors 3-like color editor is available to customize characters' appearances. Unlocked by clearing the final chapter, this feature is restricted to non-downloadable costumes. "