Custom faces (and squad.xmls) can be a nightmare, unfortunately.
From an RP perspective, we would love to have everyone looking unique and cool, and making great drama and immersion out of acting out their injuries or eyepatches, etc.
However, sometimes, some people cannot play nice, and create textures that are either stupid (in the context of a life-simulator), or obnoxious/adult, etc - though this is rare, tbh.
In practice, the biggest issue comes from the fact that the custom skins have to be redistributed to every single client on the gameserver at that time, under the control of our server, and this can cause issues, ranging from lag, to total freezeups, depending on various factors like size of the textures, and the accessibility of the location they've been stored or hosted in. Our experiences in the past have resulted in us having a 'very occasional' policy on things like custom-faces, mostly for things like Halloween or special events, when they can generally be monitored and controlled, the security of everyone else assured, and the servers kept from harm.
Sorry, but it just isn't practical for them to be enabled 24/7, and if Server 2 was allowing them, that was an oversight, and someone internally will no doubt be shot at dawn soon, for leaving it on! LOL
There are many things in life that I would love to have, and this is one of them, for sure... but just like the harem of Miss Universes, the Bugatti Veyron and the F-16 Interceptor that I want on my personal Caribbean island, it is sadly just going to have to wait.