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Yeah, the avatar in bitsy is just another sprite in terms of rendering. There's a file in the hack repo with helpers that can be used to edit it if you're interested: https://github.com/seleb/bitsy-hacks/blob/master/src/edit%20image%20at%20runtime...
It's actually not impossible in vanilla bitsy! If you edit the gamedata directly, you can add more than three colours to a palette and specify which colour to use for individual sprites/tiles/items.