Here’s what FIDE says about this. TL;DR “it’s tradition from times when you played chess while running from velociraptors”.

And in no moment the text mentions why there’s a dress code on first place. That’s because, for FIDE, it boils down to bureaucrats babbling about tradition, and power-tripping over it, to make chess as exclusionary as possible.

In the meantime, a sensible dress code makes sure that no participant dresses in a way that makes other participants uncomfortable. People in their undergarments is a no-go, but dressing casually like Carlsen did? It’s completely fine dammit.

Bloody muppets. And props to Carlsen - he sacrificed his participation in that championship to highlight this idiocy.