In any FPS, clear visuals are vital. Clear visual design communicates important details about your targets to you without you needing to think, you simply react to strong sight cues such as shape, size, and coloration. These clear visuals improve every game by letting you focus on the act of shooting instead of having to consider your target, this is especially important in a multiplayer FPS with incredibly high lethality on almost every weapon. Planetside 2, for the most part, avoids the easy pitfalls for multiplayer games, but certain customizations have muddled it.
Most of Planetside 2's visual design is laudable, the character conformity avoids much of powergaming that surrounds character customization in almost every multiplayer game to feature it. Each empire and class combination has very clear visual cues which tell you exactly what to expect, the rising shoulder pads of Heavy Assaults, the incredibly stripped down uniform of Light Assaults, or the skin-tight wetsuits of Infiltrators. Helmet design is another strong point of the game, the high domes of heavy assaults and the bright white of the medics' helmet both help distinguish these high value targets and to Sony's credit: most cosmetic unlocks don't break up these strong visual cues, almost every helmet-unlock does not detract from the helmet domes, vital for picking out heavy assaults and medics at range. The shoulder decals also do not attract attention, they are merely there.
The camouflage, however, has serious issues. Any camouflage that sticks to the basic factional color scheme is mostly fine (shades of purple with minty green highlights for Vanu Sovereignty, gunmetal gray, black, and bright red for the Terran Republic and New Conglomerate's blue, gold, and brown). It can sometimes stop you from quickly identifying a class at close range though, especially the distinction between engineers and medics who do not have the unique shoulder pads of the heavy assault or the strong center of mass cues infiltrators or light assaults have but you can still easily tell if someone is holding a repair tool or firearm.
Terrain camouflage breaks many of the carefully crafted color and outline cues that allow you to quickly discern if someone is on your side or not, the chocolate chip/mountain camouflage make you look distinctly NC with their bright brown and shades of tan, the arctic camouflage too closely mimics the color designs of the Terran Republic with their blend of whites, grays and blacks. You need to consciously stop and check their helmet or firearm, if the angle permits, this breaks gaming rhythm and takes you out of the moment. In a heated firefight where friend and foe run together in a disjointed orgy or at long range this can lead to wasted ammo, team kills, and your own death far too easily.
The situation is even worse for generic vehicles, Terrain camouflage can make it nearly impossible to tell if that wad of Lightnings or that Sunderer is friendly – forcing you to rely on sparse highlights which don't show up at long ranges. This can effectively mean you end up killing your own faction's AA or spawn point during a firefight or losing an important opportunity to destroy an enemy spawn point. Sunderer blockade armor makes this even worse – the dark gray with slight purple hue panels closely match both Vanu and TR color schemes.
Clearly Sony intends the spotting tool to be a band aid to these issues but this presents more problems. The mechanics are unclear and rather finicky, sometimes spotting hostiles on the other side of a canyon and sometimes failing to ID a Vanguard sitting five meters from you turning your squad into 'fraggeroni'. Many people forget to use it in the heat combat or worse yet, aren't even aware it exists. It also requires you to take your eyes off the target at close ranges, away from their center mass, long enough to lose your chance to attack your target.
Overall, Planetside 2's basic visual design is really strong, you can always distinguish the empire and class of a normal character by a number of strong cues such as their helmet, their shape and outline, and their colors. You will always be able to quickly tell what they're wielding, important for picking out things like Heavy Assaults when you're in a tank. Many of the customizations in the game consciously avoid tampering with these visual cues. But the camouflage issue is only going to get worse as time goes on and more patterns are released, further diluting the games otherwise very sound visual design and making it even more difficult to tell friend from foe.