When starting the game I immediately started a split screen game and found it odd that there was a circle of characters you could switch between and all of them looked the same and there was no way to change their appearance from where I was in the UI. Since all characters were stuck to the blue ball character, all of the players were forced to look the same.
Later on I discovered that I had to go to the Workshop to change the form of the balls in the circle. The first thing I did in the workshop was set up the circle so that all different available forms were represented in the circle so that a four player split screen game could be started with different characters.
The easiest fix is to add instructions to go the workshop to customize your characters.
I think it would be good to have the circle of characters preconfigured to have different forms as well so a 4 player splitscreen game can be started with different characters from the get go.
Rocket League has a different approach where each splitscreen player can customize their character(/car) simultaneously. It would require more work to do something similar for Deformers though as the UI is designed at the moment.
(Found that the feedback is somewhat related to: http://talk.readyatdawn.com/t/suggestions-for-improving-split-screen/1845 )