In some respects, your character is a bit like a Barbie doll. You can play “dress up” if you want. Since most clothing is hidden by your armor, whether you choose to do so is up to you. I haven’t noticed any difference in people’s reactions whether I’m a walking tank, dressed to the nines, or buck naked. Most likely this was something that was supposed to go into the game, but it either didn’t make it or it was so buggy that it had to be taken out.