more freeform body-sculpting ability rather than just two choices

That exists and has existed for a long time. In many games (usually MMORGs which have an incentive for you to get attached to your avatar) you can rather extensively body- and face-sculpt your character. There are still constraints imposed by your choice of race (not necessarily human) and sex. You are also limited to the general human body plan (two legs, two arms, no tentacles, etc.).

I don't know if any mainstream game (not counting sandboxes like Second Life) ever offered a fully customizable character model. There are issues here, from practical -- each player has a unique mesh and textures, and there are many players -- to social -- your game will have giant walking penises and floating vaginas.