characters can increase their star ratings which will transform some into different version, like sasuke at 2 stars becomes cursed seal sasuke. but some also have completely different versions for their characters like naruto and sage naruto

Ah so increasing star ratings is essentially awakenings from the Storm series?

Pretty much, their base stats increase by 5% each star.
not all chars evolve/transform when levling up their star tho.

Most chars which can evolve, only get 1 new form. usually from 1-2 stars.
but since Naruto & Sasuke is like the mains of the franchise, they evolve 2 times.

all 3 stars chars, c*ually not evolve, they just get increased stats, excluding 1 char.
Which is Kyuubi Naruto, he can evolve from 3 star. into his 6 tails form, from the Pain Fight.

its atm 3 different Naruto versions in the game, CN got 4.
1 version of them, can't evolve at all, that is Sage Naruto, well ofc he get increased stats,
but not a new form.

That is so cool^^ I wonder, if Deidara-San evolves?

So rock lee can become eight gate lee and not 2 star shippuden lee?

Sage Naruto would classify as an entirely separate character much like the eight-inner-gates lee would as well. Same concept with the regular characters and the Great Ninja War versions of them.
However, just because they're seperate characters doesn't mean you can have them on the same team at the same time. So you can't have normal naruto and sage naruto in your lineup. The game doesn't allow it.

you can check the stars of any ninja you own, go to where you would normally go to upgrade their stars, click the question mark *on and it will show you the ninja in each star level, then you can see if that ninja transforms by upgrading or not