Do people still dress in colours that suit them, their hair and skin tone etc?
Yes of course (if they can figure them out). I think what people are saying is that black isn't necessarily the best colour to pair with your favourite colour.
My sister has a 'rule' which she is ridiculously proud of, where she refuses to wear black. At all. If she wears a green shirt, she will pair it with green trousers. This works for some people (think of Meghan Markle's beautiful green blouse with green leather skirt) but it certainly does not work for everyone. Its a look that ages my sister and makes her look frumpy.
As another poster pointed out, shoes play a big factor in wearing colour and colour/clashing patterns etc. In summer its not as big an issue as white trainers/clashing trainers/sandals go with everything but in winter, boots are primarily brown/black and a heavy black boot can kill an outfit.