I can confirm gloss skin setting does not fix the outerwear bug. As others have already mentioned, as long as you have an old PSO2 body outfit or outerwear equipped, you can trigger this bug. However, I was not able to replicate the height increase or the muscled up appearance, only the pale skin change part of the bug.
Requipping the outfit will fix it as long as your character is in the same sector or field of view from other players. Teleporting away, either you or the other players, will trigger the bug. So for now its better to either not wear outfits/outers or continue to reequip when others point it out, until Sega decides to fix this.