Only works in studio?

Please watch your tabbing. Tabbed code is much easier to read.

Here are the problems with your script:

1) You connected a 'CharacterAdded' event to a function that adds a Character, which will loop until maximum event re-entrancy depth has been exceeded, as it says in the error. So, you will have to add a debounce.

2) You are setting 'player.CanLoadCharacterAppearance = nil' after the Character has already been loaded, so it will not work. You have to move it up.

3) You should use :MakeJoints method of the new character's model so you don't die when spawned

4) Your old character will not be removed, so you have to remove it after you set Character property of the player to the new character

Here is the fixed script:

debounce = false
game.Players.PlayerAdded:connect(function(player)
    player.CharacterAdded:connect(function(character)
        if not debounce then
            debounce = true

            player.CanLoadCharacterAppearance = false

            local oldChar
            while not oldChar do
                wait()
                oldChar = workspace:FindFirstChild(player.Name)
            end

            local ControllerService = game:GetService('ControllerService')
            for key, value in pairs(ControllerService:GetChildren()) do 
                if value:IsA('HumanoidController') then 
                    value:Destroy()
                end
            end

            local newCharacter = game.ReplicatedStorage.newPlayer:Clone()
            local SpawnLocation = game.Workspace.SpawnLocation

            newCharacter.Parent = workspace
            newCharacter.Name = player.Name
            newCharacter:MakeJoints()
            newCharacter:MoveTo(SpawnLocation.Position)

            player.Character = newCharacter
            local Humanoid = Instance.new("Humanoid", newCharacter)
            newCharacter.Archivable = false

            oldChar:Destroy()
            debounce = false
        end
    end)
end)

Hope this helped.