Your editor sounds like an idiot and non-professional. If all characters wear hoodies as part of their costume, are they all always sneaking? What is the difference between a hoodie and a Halloween mask, or painting the face entirely bright blue, or wearing a ski mask? That makes no sense, and even if they have money, dealing with people that refuse to see reason is a mistake you should not make.
So the question becomes (if I were in your place) does this editor and publisher truly value my story telling and artistry so little that they would make this hoodie a deal breaker? Because that would make me a slave to their every whim! If they want my character to show more power by having a much larger crotch (or much larger breasts, if I have the gender wrong), I must draw that. If they want my character to also carry a whip, because whips are selling this month, I must draw that. If they want me to flashback to when my character was an assassin for money, even though that was never a part of my story, I must draw it.
I would see this insistence on "hoodie or forget it" as a symptom of a deeper and larger problem: They don't value my work, they want too much control, and I won't be able to tell the stories I want.
I will say editors should have some unilateral powers, an example by extremes could be they refuse to publish a story in which your character, temporarily drugged by a villain, rapes and murders an innocent young girl.
But in my opinion demanding a hoodie is nowhere near the border of such powers.
I would test this, and feel I have nothing to lose. I would refuse, respectfully but adamantly, to draw the hoodie, and thank them for their interest and inform them I feel that, if the hoodie is unconditional, I must seek publication elsewhere.
If they let me walk away, I am better off, I can find somebody that values my artistic vision more than they did. I won't be a slave to their whims. I am at least as well off as the day before I ever heard of them.
If they come back and say they wish to talk further, fine. I would still be eager to be published, and I will have proven I have a spine and won't be bullied.
Obviously this is advice for you to consider carefully, I certainly won't be the one suffering the consequences! But I have done exactly this on actual paying jobs, in the past, and both kept the jobs and gotten what I wanted.