Well, if I had to guess, it would be the same reason Tera Online censored the outfits of the North American releases outfits of the Elin.
Many on the outside looking in, that aren't gamers, who aren't into Anime, or who wouldn't know that players just want ridiculously short or tall characters, would potentially see the option of short, anime looking characters in revealing outfits, as lolicon, as the very revealing and skimpy outfit options this game has, would be guaranteed to cause some self righteous politician to try and have the game shut down,or heavily censored, had we been given these options.
While most normal people wouldn't react in such a way, we live in a society where cancel culture is paramount to many political parties, and the very systems they wish to enact upon the opposing party here in the West. Democratic and Republican leaders/activist movements, are both equally guilty of this flaw, as both wish to censor and control some aspect of someone else's life.
Look to how certain laws have in the past, been used in broad strokes to act as an excuse for censorship in the general sense. Too much government is just as bad as too little, yet nobody has found the balance.
This height censorship is no exception, and it's a moment where the company has taken the proactive step to pre-censor, within reason, as to prevent possible legal issues, at least in my opinion. The only other logical option would be outfit censorship, and that's far worse than a foot or a few centimeters of height difference in my opinion.
I say be happy with what you got, because in all honesty, the height difference is barely noticeable, and offers the company some leeway in the future if laws pass in the future, that are even more restrictive. At least that's how I see this move by SEGA. It's a very smart move, given the world we find ourselves in, a world where even the most innocent of spoken words can be seen as offensive somehow. A world over sensitive to differences of opinion, where hate of said difference runs rampant. Perhaps in time, the company will lift the restrictions in better times, but it probably wouldn't be any time soon.