Thank you for replying to the people having issues, as all testing with the mod loader on my end works perfectly. The mod has a text file that details how to install and how it worked for me.
You're welcome. I got the idea from modding Crash Bandicoot 4, many of the mods required that "~mods" folder, and since Spyro and Crash are being made by the same companies, I thought maybe it would work for Spyro too, and sure enough it did. I initially couldn't get the skins to work either until I tried this.
Just wanted to say, some of the mods, like darkblueblack, blueblack, darkredblack, they all don't work. The ones so far I got to work were purpleblack, yellowblack and orangeblack
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First, got to "Steam\steamapps\common\Spyro Reignited Trilogy\Falcon\Content\Paks"
In the "Paks" folder, create a "~mods" folder, no quotation marks of course.
Put your selected skin into the "~mods" folder and it works like a charm, works for other mods too.
I did not test this for every skin, but so far every skin I've tried works fine now. Hope this helps.