that losses feel bad to a greater extent than equivalent gains feel good

That sounds like usual risk aversion. How is that a bias?

The only sense in which e.g. value and momentum stocks seem genuinely “riskier” is in career risk ... but if he chooses Ol’Timer and it underperforms he is a fool and a laughingstock who wasted clients’ money on his pet theory when “everyone knew” NuTime.ly was going to win. At least if he chooses NuTime.ly and it underperforms it was a fluke that none of his peers saw coming, save for a few wingnuts who keep yammering about the arcane theories of Gene Fama and Benjamin Graham.

A financial adviser advising an individual investor that only buys few assets might have this problem, but a fund could diversificate on thousands of different assets, therefore reducing this "reputational" risk. Which brings us to the following point:

Though traditional index funds are a reasonable option, in recent years several “enhanced index” mutual fund and ETFs have been released that provide inexpensive, broad exposure to the hundreds or thousands of securities in a given asset classes while enhancing exposure to one or more of the major factor premiums discussed above such as value, profitability, or momentum. Research Affiliates, for example, licences a “fundamental index” that has been shown to provide efficient exposure to value and small-cap stocks across many markets.56 These “RAFI” indexes have been licensed to the asset management firms Charles Schwab and PowerShares to be made available through mutual funds and ETFs to the general investing public, and have generally outperformed their traditional index fund counterparts since inception.

Why in recent years? Why aren't these funds more common? And since you are talking about "rebalancing" in the next paragraph, are these funds really automatic, like index funds, or do they still require active portfolio managment?

I think there is a kind of "meta" risk you are not considering here: index funds are proven investment strategies, based on empirical evidence and economic theory. The investment strategies you propose here are more uncertain.
You link many studies in favor, but I don't have the expertise to evaluate their relevance, and I suppose this holds true for pretty much anybody who isn't a professional investor.
From the "outside view", the strategies you propose are inherently more risky than index fund investment.

One of the greatest misconceptions about finance is that investing is just a zero-sum game, that one trader’s gain is another’s loss. Nothing could be further from the truth. Economists have shown that one of the greatest predictors of a nation’s well being is its financial development.

Correlation doesn't imply causation. It is plausible that correlation actually goes in the way opposite than what you are proposing: in wealthier nations people have more disposable money to play zero-sum games with.