I can’t see a reason to get wound up about something like this.
some religions call for modest clothing.....It’s not calling other clothes ‘immodest’ people are far too easily offended.
But that is exactly what it's doing, and it's exactly the reason to get wound up about it.
It's one minority religious culture (or a group of them) subtly imposing a value judgement on the rest of us by giving themselves the label of modest in comparison. In spite of protestations otherwise, It implies that the rest of us have at least a degree of immodesty, a lack of self respect and a lack of decorum. How could it not? 
I don't object in the slightest to Muslim women (or anyone else) being able to find clothes that suit their perceived needs. I don't object to M&S including items in their range that reflect that niche but ever increasing market. I just object to M&S toadying up and doffing their cap by using the word 'modest' to describe those clothes, and therefore those women. It's disrespectful and contemptuous towards the majority of their female customer base and it puts those minority religious groups on some sort of assumed moral pedestal.
If the definition of modest is orderly, within bounds, moderate, restrained' then it follows that not dressing 'modestly' would be to dress in a disorderly way, without boundaries, in an extreme and unrestrained way.
That's insulting.
Muslim women are quite capable of walking around a shop until something suitable catches their eye just as much as non-Muslim women. The search engines online already allow you to search by length of skirt etc. There is really no need for this.