It really has nothing to do with cost. Creating a character customization system that offers plenty of options is a lot more expensive than just creating a static character model.
The main argument for using the Featureless Protagonist is that it makes it easier for the player to project themselves into the character. A well-developed character will have views and opinions that might conflict with those of the player. Their decisions and actions will not always be those the player agrees with. This can lead to cognitive dissonance when the player tries to identify with them.
And this also works in the other direction: RPGs are about giving the player freedom (or rather the illusion of freedom, but that's a whole different subject...). But this freedom can collide with the characterization of the player-character. For example, when the player has the protagonist do things that seem wildly out-of-character for them. Then you might end up with some jarring ludonarrative dissonance. A featureless protagonist helps here, because in that case it's up to the player to decide what is and isn't out-of-character behavior for them.
Which of course doesn't mean that an RPG with plenty of meaningful choices can't work with a well-defined protagonist. At least if you have good writers on board who can come up with plenty of options that cover most player intentions and still make all of them seem in-character. Some famous examples are the The Witcher and the ReadRed Dead Redemption games.
And then there are also games where the protagonist is highly customizable and of malleable personality, and yet has a place within the game world and a character arc tied into the larger narrative of the game. Like the Mass Effect trilogy or Cyberpunk 2077.
So neither choice should be considered inferior or superior to the other. It's just one of many design decisions to be made when developing a game.