That's weird, because it does for me. How about this? you can't pick the same character but I didn't get around to updating the UI when someone locks a character you're already highlighting.
I'm sorry, i really wanted to play your game ...
Oh, that's a tricky situation indeed ! Would it be to set the other player in a different color, like in super smash bros ?
The easiest way would be to add a check whenever a player is selecting a character, and if the character he's selecting is the same as his opponent, then you could update the UI