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Yes and no.  If you look at the game files, you'll see how much work went into those facial expressions - Kotone literally has almost as many pngs as half of the other monsters put together.  The methods Thresh uses to do faces - the layering most notably - requires precision and time.  It's just not really viable for all the encounters and such.  Moreover, changing scenes mid-battle would be very detrimental to the smoothness of the game.  The Sophia fights cause micro-stutters in the game when I play it and she transforms, having your character repeatedly shifting animations whenever you enter/exit a stance?  Not really viable, both in terms of creating all that art and implementation with the current systems.

Remember, this is done with an extremely small team.  All the art is custom-made, and Thresh is more interested in finishing the story before adding bits and bobs.  That's not to say it'll never happen, just that a major overhaul like that isn't likely before the story is complete.