> It's signalling working as intended from the perspective of people who think they can tell everything they need to know about someone by how they dress.
Everything? No. It's a somewhat noisy signal. It is a signal, though, and absolutely does carry useful information. For instance, the poorly-dressed are one of, or some combination of: poor; ignorant of fashion; aware of fashion, but nonetheless not putting effort into it despite knowing its benefits; or are deliberately choosing not to dress well. The well-dressed are one of, or some combination of, the opposites of those. Clearly, then, you can tell some things about people from how they dress, or at least narrow down the possibilities.
Someone choosing to communicate deliberately over that signaling channel, or deliberately trying not to is, itself, information, as is someone trying to but missing their intended message, or someone plainly not understanding that it's a method of communication, or communicating with a message tuned for the wrong audience. This is how you end up with things like computer-nerd "uniforms"—they must make it clear they're trying to be non-conformist, as that's the signal they want to send, distinct from "I'm very poor", "my background is, in fact, low-class, and so my attitudes continue to follow", or "I don't know how to dress well even if I wanted to".
Every time you correctly identify a geek from across a room, or out on a trail, or on the street, based solely on how they're dressed and how they carry themselves, that's fashion-as-signal working very well. Does that mean you can so-identify every geek? Of course not. Does that mean there's no information available in fashion? Of course not. Are the geeks who choose to make it very obvious they're a geek sending a signal you're intended to receive? Oh my god, yes. And the ways they choose to make it clear further refine that message.