DD1 used to feel very self-conscious about her curly hair (she has ringlets) and said some of the kids called her "curly top" or something like that. She wanted me to straighten her hair for school which I wouldn't do (her hair is soooo thick). I want her to accept herself for what she has and I don't want to have to do it all the time! But if it's something she perceived as a flaw in herself I don't know - I think it depends so much on the child and on what the issue is.
I guess I'm not sure what I would have done. I don't think I would have let her use concealer, but I think until you are in that situation it's hard to know. You seem to have a very good relationship with your daughter and she knows you have her back, which is a good thing.