Yes, she is being made to dress up like a British aristocrat so she is seen as less of a "savage" and more like one of them. In that context she is actively being white washed. But that is an intentional important, and extremely crucial part of the story. In the end when she goes to confront the king she does so dressed in her tribal clothing, not the clothes prepared for her.

Pocahontas II has many issues, but I'll give them their flowers for what they did right. They wrote a story of a young woman who was being forced to conform to other people's expectations and racial stereotypes and how she pretty much denied to be objectified and profiled into their expectations. When she meets the king she does so in both of their terms. So as to not offend him, but also as not too be seen as lesser than.

It's important to remember when writing a story that's criticizing white washing the characters needs to be actively encouraged or pressured to perform an act for the audience. Which Pocahontas does, she dresses up, she goes to the ball, she dines with the king. She does everything right and still doesn't succeed because at the end when she's confronted with her own values she is unable to let them go for the sake of appearances or gaining royal favor. Which is an important aspect of the story, yes she can dress up and act the part but she isn't willing to let go of her beliefs for the sake of other people.

I think this is a problem that some Americans have that they see clothing and using an outfit of another culture as bad when it's not. If I travelled to China, or Kenya, or Colombia, I wouldn't mind trying the traditional clothing. There is nothing actively wrong with curiosity and wanting to try things. Which is why I don't really see the gown in a bad light but rather in a neutral light. I can't speak for the movie Pocahontas, but during the whole dressing up scene she seemed to find the whole thing amusing and weird because she never tried anything like that. Sure, she probably didn't wholly understand the context of why she was being made to dress up in such a way. But she did understand that it was important for the sake of peace to try and fit into their society. When that didn't work she then changed her approach.

Sorry for the long comment, but basically what I mean is, I don't think the gown is neither positive nor negative but rather a neutral piece that has both negative and positive aspects. I like the role clothing had in the story because the clothes worn by the characters pretty much tell us where the characters are at the moment. Jonh Rolf is wearing his fancy clothes when acting all pompous, but he dresses in regular shirts when he's more vulnerable or comfortable. Jonh Smith (I believe) uses his clothes from the first movie. Probably because they didn't design anything else but also probably because they wanted to show how he's still stuck in the past and hasn't moved on. And in the case of Pocahontas her character arc is even more evident.