Ideas
I always pipe up on this problem, it has been a pet hate of mine for a long time. I'm forever traumatised by the many many grannies in crop tops, etc. I've just now gone back to the Style Influencer career and chosen a couple of really simple looks for Townies with Masculine/Feminine trends. I've also chosen the Fame Perk where Townies will copy my famous Sim's outfit. So I'm starting to see some better dressed Townies.
Unfortunately it goes with the current excessive Townie generation problem. The new Townies are all in random bizarre outfits with all the accessories. I clear them daily but as I'm going through Other Households to delete them I'm constantly bemused by their strange ensembles. The new headband is the most common accessory and when I edit some I notice that some actually have several nose piercings highlighted in CAS but only one is being worn as it's too big to fit the others on the same nose. The game is literally trying to put 2 or 3 piercings in the same spot which suggests something isn't working correctly. I also see some Sims wearing outfits around town that aren't in their CAS selections. Sometimes they are my Sims and I know I didn't dress them that way.
On Xbox Series X with all content installed.