Well malice I thought about that myself, and came up with 2 possible solutions
A- If you actually look currently "green" squads for allies do not show up fully green. The only green parts are the outgoing. Those can stay that color. The inner part (as outlined by elcent) Would be the part customized.
B- Something similar to your idea, I also got it from for honor. Making an array of colors for your enemies to see. Then an array for your allies only, and of course I think for yourself to see only would be any color, since its you. You should know what YOU look like
As per the second post malice I also believe that all should get to see it. I agree that some basic colors do need to be added for reds only. Sort of like how Halo Reach was. You could BUY 1 or 2 armor sets, but you had to unlock some of the cooler ones. and the REALLY cool ones were earned with ingame rewards.
One last thing here, to compound on it, there could even be custom "legendary" skins for those who have reached REALLY EXTREME things like 50 medals (Rani skin for instance) and maybe even ones for highest alliance score of all time.
Lastly I will mention this is why I think supermechs does so much better than battledawn. You go and right at the start there is legendaries sitting staring at you. Its only natural you want that, so some people pay right off the bat. Where as in battledawn its really hard to see what the benefit to paying is as a newb right off the bat.