Does every single RPG run on Frostbite 3?
An advanced engine is supposed to make it easier to have features while lowering the cost, not the other way round.
As far as I can tell, there are two options: stiff, long hair that clips through your armor, or relatively short hair that looks more natural. I personally prefer the latter.
There are more options than stiff long hair and stiff short hair. There's skinned hair that stays stuck to the body and bends with it but doesn't clip, and hair with physics that bounces and sways, doesn't clip, and aligns to gravity. I personally prefer the last one but the second last option is really the least you can do in 2014. And let's not talk about the practicality in combat because there are npcs in the game too you know.