They do on pc versions, but not consoles due to consoles being more restricted and also most likely so people can't go making rude skins for online play
But they could've hidden those custom skins people used from people who are underage, therefore a universal censor isn't even needed.
And companies have gotten more strict on who can access their services nowadays, and if you can't prove your age some content you can't buy or even access the store page.
Microsoft can request forms of ID from people, if users don't provide them then Microsoft can keep the censors on.
If something is offensive and violates the code of conduct, Microsoft can remove it, and ask that individual responsible not to do it again,
or risk an account suspension, although in this case it's more appropriate to simply just remove that persons privilege of uploading images
to Xbox Live if they keep uploading offensive content, disabling their entire account and destroying their purchases is overkill in most cases.
custom skins where you get a blank white character that you can color pixel by pixel
But they could've hidden those custom skins people used from people who are underage, therefore a universal censor isn't even needed.
And companies have gotten more strict on who can access their services nowadays, and if you can't prove your age some content you can't buy or even access the store page.
Microsoft can request forms of ID from people, if users don't provide them then Microsoft can keep the censors on.
If something is offensive and violates the code of conduct, Microsoft can remove it, and ask that individual responsible not to do it again,
or risk an account suspension, although in this case it's more appropriate to simply just remove that persons privilege of uploading images
to Xbox Live if they keep uploading offensive content, disabling their entire account and destroying their purchases is overkill in most cases.