I submitted a save file, I generated a new Sims 4 documents folder without mods, created a new game, deleted all the premade sims and then let the game generate sims for all worlds I visited. I wanted the game to generate base game sims, city living sims, students in britechester etc... I ended up with 80 generated sims.
Not all sims ended up looking terrible, like this sim to the left. But the game also generated many sims that looked like this sim to the right which have way too many accessories and makeup that doesn't look good. Pretty much all generated sims also ended up with some strange outfit like a formal outfit ,workout outfit or hot weather outfit with way too many accessories.
As far as I can tell, this happens to all generated sims, so this is not related to any situational outfits or any specific sims like City Living Sims, Students etc. The way that the game uses accessories need to be tuned, I would prefer if the game just turns them off for generated sims. Townies don't need accessories, socks or makeup.
