In my understanding, the で following 日本女性 could correspond here to the english "of," or "speaking of." Thus one interpretation of this sentence (though in unnatural english) could be:
Speaking of Japanese women, seeing someone put makeup on in the train makes me embarrassed and uncomfortable.
Is this interpretation correct?
For the sake of comparison, here are two other interpretations of this sentence made more natural. Hopefully the meaning does not differ greatly.
When I see Japanese women putting makeup on in the train I feel so embarrassed and uncomfortable
Seeing Japanese women putting makeup on in the train makes me embarrassed and uncomfortable.