I think you’re trying to draw a hard line where none exists. In general, there is no clear boundary between matching your appearance to the situation and mere fashion games; of course there are situations where costs outweigh potential gains (you probably don’t want to go into debt to buy an Armani suit), but it’s possible to overinvest in almost anything, and I don’t think there’s a case for generalizing that to the entire category of fashion.
I think you’re trying to draw a hard line where none exists. In general, there is no clear boundary between matching your appearance to the situation and mere fashion games; of course there are situations where costs outweigh potential gains (you probably don’t want to go into debt to buy an Armani suit), but it’s possible to overinvest in almost anything, and I don’t think there’s a case for generalizing that to the entire category of fashion.