I agree that this looks like the slot rays aren't being calculated correctly. I just exported and reimported the mesh using Sims 4 Studio (which automatically corrects many slot ray issues), and the item works fine with all the garments I tried. For example, the original garment wouldn't work with the heart underwear, but the fixed one does (original on the left, after import/export with Studio on the right):
http://i.imgur.com/lTEnSOX.jpg
Also, with the original .package you posted, I noticed that the arm placement is very garment-dependent. This was also true if I just used the same .package and exported/imported the mesh using Studio although none of that garment-dependence caused the arm to shift the wrong way (in the picture above, the arm is moved a bit further away from the body than is usual). However, when I made a new clone using Studio and imported the mesh into that instead of the original .package, this garment-dependence displayed by the arm did not occur:
http://i.imgur.com/4CBJg8J.png
The problem does not seem to be inherent to the mesh itself but rather with how it was handled when it was imported into the .package you posted.