Wearing simple clothing means you do not need to spend time worrying about how this colored shirt looks on you vs another. It allows one to focus on what’s inside vs the outside. In Chabad chasidus lingo: pnimiyus vs chitzoniyus.
In Chabad it used to be acceptable to wear colored shirts, because it was assumed that bochurim we’re penimiyus and didn’t care either way. That has changed, and all yeshivas bow require white shirts.
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