You can wear clothes such as those worn by NPCs in the game by installing the Wearable NPC Clothes (U7) mod. It does this by changing the player model to the same as NPCs, so you can wear combinations of clothing typically only worn by NPCs in the game.

The player model is changed in two places: the first is the base clothing, and the second is the main body. The base clothing is what you start with and what you will wear until you die. It consists of a shirt, pants, shoes, and a hat. The main body is where you change to. It can be in the form of a man, woman, or child. The main body can have multiple pieces, such as a skirt, a top, etc. It can also have a hood, a belt, etc.

To install the mod, first unzip the mod folder into your Streaming Assets folder.

Then, drag a single json file from the Outfits.zip file into the folder.

You can now play as a character and change your outfit. You will not lose your current outfit, but you will have a new outfit.