Good news! I just checked, and thankfully I had saved a backup of all my old files from the previous time I changed my game stuff (terrains/textures/etc) and I just copy/pasted those files into the overlay folder; Character selection & preset creation seems to be working without any problems now since I've put those backups into my FH basegame folder.
Thank you both for your help!

I'm so glad I kept those backups now phew!