I made 2 posts but they're not approved yet. Since then I discovered a fix for anyone who generated characters prior to the mod's install, specifically those using the custom bodies who won't toggle from the default clothed state.
This will involve save file editing. I recommend using Notepad++ with the "JSON Viewer" plugin, otherwise it is extremely hard to read the file.
The solution is simple. The 'broken' characters are using the base game character file, the non-broken ones are using the modded file.
First find the character you need to fix. You can simply search their name then scroll up until you find something like "hid3394222865": { This will be the start of their character data.
The fix is right under that line.
Change:
"@path": "res://src/character/CharacterClass.gd",
To:
"@path": "res://tmp/modded_class_slave.gd",
Save the file... fixed!
Alternatively you can do a 'replace all' if you have a lot. It doesn't seem to be used for anything else?
As for default vanilla body characters, I don't think it's possible to 'fix' those. You can 'fix' them the same way, but it will use the mod resource to try and display their image, which won't exist, so it will show a generic silhouette. I've tried to mess around with the mod code but I don't understand anything about coding actually, so someone else will have to work on it. If I were to guess, a separate routine has to be run to check if a character is using a generated image (dynamic_portrait=true) which is checked before the mod's routine.
EDIT: This also fixed the battle formation issue! (can't move chars)