I train altar servers. Wildly-colored hair does not meet the dress code, but it is not because someone with bright hair is unworthy as a person, and we go out of our way to point that out. We point out that while bright colors, bold prints, and “bling” on clothing, socks, shoes, hair color, and nail polish might look perfectly fine when put together for an ensemble for normal Sunday attire, it looks silly when paired with the austerity of a white alb. That is all we need–to take a bunch of good Catholic kids and make them into the parish fashion police!!
More importantly, though, we insist that our altar servers serve because they want to, not because their parents want to make them. A worthy liturgical ministry cannot be compelled. We also point out that fashion choices that would be distracting with an alb are nevertheless perfectly fine in the many other ways a young person can positively contribute to the parish. IOW, the dress code only has to do with avoiding a distracting look at the altar. It is not a sin, not even a venial sin, to choose bright fashions or an odd hair cut, and it doesn’t make a person unworthy to do the work of a Christian! Altar serving is one among many ways that a young Catholic can serve his or her parish. (Ideally, it is not the only one for any of them.)
We do have one server who has subtle hints of red on her black hair, and she looks fine. As I pointed out, if a female server wanted to color her hair in a color that really was at odds with her alb, she could wear a snood while serving, and it would not be a problem. (I would not even require that the snood cover all of the color, only that the intention to take on a toned-down look for the sake of serving the Mass was made clear.) It is the combination of the hair with the alb within the context of serving inconspicuously yet near the center of attention that is the issue, not the hair itself. All servers with long hair have to contain it, not because we hate long hair, but because it is distracting for those who cannot help seeing the servers to wonder if a server is going to get too close to a candle and light his or her hair on fire. For that reason, even hair that is probably not much of a fire danger must be contained if it is long enough to appear to be one.
You’re right, though: if that is not pointed out, kids could easily conclude that a person’s baptismal dignity changes with their fashion choices. That is not true.