I don’t think they overlooked it. I remember this being brought up by the community several times in the past. The previous community manager Saltypatra addressed it on stream and it was mentioned in follow-up posts. IIRC, Salty said they tried it with avatars and it didn’t make enough money to justify the cost. I think she or another CX person said cosmetics don’t work for a game of this (smaller) scale, or maybe the whales in this game don’t care about cosmetics.
I do think it’s a missed opportunity, at least because there are more options besides avatars. Alternate art for troops would be cool. Card “frames” could also be interesting or other any cosmetics that are very visible during battle.