I really liked what Celia said that what we wear or how we dress often creates a narrative in the eyes of others. I have a general impression of how people that I know (but don't know well like close friends or family) dress and I make judgements/stories around that. I know other people notice too because in conversations, someone will say "well she often wears puffy jackets". I think there are many people who make stories up subconsciously like me about someone purely on appearances, but whether everyone is like that, I"m not sure. I remember when I first discovered YLF, I was talking to my mum about her small community and she started using the phrase signature style to describe how people dressed. It wasn't a conscious signature style but just how others tended to dress and it had created an impression.
Some people dress like they don't care and it is still creating an impression, not a bad one but I would make the assumption that clothes are not important to them. Stagaire fash makes the good point about subconscious messages that are given off.
I have been watching a few netflix/neon series and I wonder how the stylists work in these shows. Sometimes they do it really well and subtly show a personality through the clothes, not in a caricature way but with slight differences in dress style. Echo's description of the various school teachers made me laugh because I could recognize the predictability in my own school. I also unconsciously interpret a persons thinking or decision making process in the clothes they chose if it is an occasion where they must have had to make a decision...eg not just throwing on your work clothes....like teacher only days which are like no uniform days to teachers...how does one dress down.....when the principal decides that a suit will be too formal for the occasion but he can't come in ripped jeans. Or when people dress up to meet certain people like family gatherings..
Sorry for the novel and if I got off track.

In terms of specific items, I agree that most people don't notice unless it's a standout piece ... Unusual colour, etc. I do agree also that people form an overall impression based in part on appearance, which clothing plays into. I think whether we like it out not, we are communicating something about ourselves with our clothing, so even if we are not fashion people it makes sense to bring some intention to our clothing choices.

LaPed mentioned that children do notice and I agree. I dress mostly for myself, but also for children, they especially notice my accessories. But hardly a day goes by that I get compliments from strangers. They especially notice attempt at bookending. My last memorable comments were in Walmart from a man shopping with his wife. Everything was noticed.
I notice a more general impression of style, colors, shoes. Polish or not, a general sense of style being dressy, casual, sporty, athletic, or a hot mess.

I notice if someone really stands out from the norm mostly. I saw a lady yesterday in a purple outfit that reminded me of Lady O at Biden's inagueration. Just wow! Her family's outfits didn't register at all. This was in a town of under 1000 people, but I'd have noticed her in the city too!

I believe all the way we are presenting ourselves in the public is (in the best case) about personal decisions limited by our pesonal possibilities, of course. Our decisions are showing off some priorities, even character/personality traits and help us orient ourselves between people- sort of the same as metacommunication does. BUT should never be the single one feature for judging a fellow.... In fact I keep training myself for NOT judging anybody at all especially if it does not meet my ideea of congruence- as always remind myself that one is my very own and subjective one- so by no means general/standard or whatever more. With my own maturation I just like to discover beauty in the dissimilarities, more in a philosophical way-

if you want:-) that's the joy of my later life.

I do think people notice, and that they make initial judgments based on what they see. But it’s context dependent. One leg of my life I was living and working in the city, and the same suit would make me look like the hotel/condo staff to the more affluent residents of my building, a successful business person at work, and a corporate tool if I strayed into the warehouse district.

cat 2 lol! I have the same suit(s).
I agree people notice, likely when they are idle. I have no idea what anyone wears on busy days; on slower days I observe more.
I have no doubt that unfortunately people are treated differently based on clothing & overall appearance.
I've heard people say they wear something repeatedly or wear something unusual to work & because no one commented they must not have noticed.

I notice what people are wearing, too. Lots of people, including my husband, don’t. Some people notice but don’t comment. There’s probably a Venn diagram somewhere.

I know I make judgments about people's appearance - and with age I'm much more aware of my mind processes and am trying to not be so knee-jerky with internal assessments.

Jaileen - yes - our old friend the Venn.

Cat2 - ditto on the suit.