I’ll be honest. I don’t really think this is racist. Not intentionally, anyway. However, I live in Korea where far more blatant displays of racism make it on television regularly, so I’m hardly the one to ask.
Though I didn’t finish Final Fantasy XIII (it RROD’d my 360), Sahz was my favorite character. I can totally understand wanting to dress up like the most likeable character in the game. Still, I wouldn’t be caught dead painted up like this.