I suppose the feature isn't activated in campaign because all portraits are already used, one by player for created character, all other by squad members.

I don't see much solution beside adding a bunch of portraits and allow choose among those not used, plus eventually an option more mod like to allow use them all and auto switch the soldier portrait "stolen" to one of those available.

An XCOM play like is facing the problem too, any new soldier hired has a same generic helmet icon for portrait, that's very meh and not cool.