At a certain point last night I could no longer choose a character without having my game crash, what I noticed is that during this time myself (and others who had the same problem) all had character portraits as if we were using modded characters instead of the traditional (?) symbol in the top left where the list of players in the lobby is located. Others I've talked to have the same issues and steps are reproduced exactly the same, even coming as far as to conclude that the same time last night is when this began to happen for us all.
Luckily, a few of us have figured out that resetting the customization options for character portrait background and profile pictures back to the default settings then queuing for a game is the fix. The (?) Icon comes back when a character is being chosen instead of the modded character icon.
The strange thing for myself is that I choose the exact options I had prior to fixing this problem I re-selected the portrait background and profile icon i had before (Dark forest background, Waffles profile picture) and now I cannot get the problem to happen again. So I don't know how to reproduce this problem, but even now with the issue fixed I'm still seeing people with the modded character portrait as I described occasionally and they always seem to crash or leave the lobby, never get to a point where they choose a character.
Seemed to just "happen" but I know the fix is to default your profile icon and background to the blank portraits (what you start with before you get any items at level 1). When the issue is occurring, profile icon in top left will be replaced with a modded characters icon for effected players, attempting to choose any character crashes the game with the attached image being the crash report. After fixing the issue I and one other cannot get it to happen again, even by choosing the same customization options we had prior to fixing the problem.
A developer has marked this issue as fixed. This means that the issue has been addressed in the current development build and will likely be in the next update.