TBH, I think the dev's obsession with finding "in-universe" explanations for stuff like this often raises more questions than it answers.
They've said you're viewing the "holo-me" from a first-person POV. You're sat in the pilot's seat staring at a holographic image creation tool.
If that's correct and, in-universe, you're actually making the holo-me image look whatever way you want it, you've got to wonder what it's for.
Is it for transmitting holo-projections across the galaxy... even though everybody else communicates via text messages and they need to use spaceships to carry data from one star system to another?
Perhaps it's so you can join a 34th century dating site or use dodgy holographic chat-rooms?
I think we should be told!
Personally, I'd rather they just called it a "character creation tool", stuck it in the options menu, and acknowledged that it's part of a video game.
I overall agree with this sentiment, but I don't mind that it's accessible on your ship.
However, I always have a problem with the "it's part of a video game" arguement. Honestly, it's not an either/or binary dynamic argument we should be having. Simply an acknowledgement of which parts add to the game by enhancing the simulation elements of the game, and which should be separated out and recognized as necessary for gameplay, but not lore.
Trying to make cross-galaxy telepresence a thing feels like it's going to cause more lore-related problems than it will solve.
