Maybe, a bit too fidly, but better player and clothing size tracking? Could open doors for mutations/traits which modify player size.
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Depending on how much the clothes are bigger then player, they give more warmth, coverage and ecumberence. And if clothes are smaller, then they penalize these qualities. To the point of that you may not wear them at all or damage them then worn (and can only wear clothing of that size if it is damaged to that level).
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Like it was said by op, if one fits too large clothes, he gets rags/leather/plastic instead. Clothing size may determinate how much material you get from cutting them apart and how much you need for repair. As a shortcut, if players size is smaller then larger damaged clothing which is being repaired, it should “use up” its size instead of material to repair the damage levels.
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Another implication would be clothing store variants for children and overwheight, and sports store for children and profesionals (more speciality equipment?). z’s would naturaly drop smaller clothes, then Z’s.