It's bullshit. It's more culture war nonsense (we have an entire thread on that, plus threads on communities like Bikini Battle Armor Damage and r/mendrawingwomen).
I don't want to derail the thread too much, so I recommend those threads if you want a more detailed breakdown, but it will suffice to say that argument fails on many levels. From the lack of an end state (how many ugly not conventionally attractive characters are enough?) to the hypocrisy of resisting this going the opposite way (look at Mass Effect: Andromeda to see how the women get beaten with the ugly stick while the men are supermodels).
That's assuming you get that far. There are foundational flaws, like premise that unattractive = creative when ugly/butch female characters are the cliche now, Mass Effect, Ghostbuster 2016, The Last of Us 2, The Outer Worlds and many more all have ugly female characters to the point where it's difficult to find an attractive female lead in a game these days outside of niche anime games. Or the idea that existing characters need to change instead of making new ones.