Dress any baby for the physical comfort of that baby. Not for looks, fashion, status, parental pride.
You know how it feels when a label scratches, collar is too tight, fabric is a bit itchy/sweaty, something digs in? Baby skin is far more sensitive; and they are really bad at temperature regulation. So anything a teensy bit too warm/sweaty/ constrictive/itchy/pokey/hard/irritating, a baby will react the only way they know how; bawling, thrashing. . Unable to settle, sleep, feed.
A loose pure cotton babygrow is ideal. Preferably one without a collar because newborns have very short necks unused to constriction. With no fancy embroidered picture (the stitching is itchy/ tickly/ sharp on the inside,).
Anything with polyester or nylon is unabsorbent/sweaty, and anything wool is tickly/itchy. Frills are irritating.
No buttons poppers down the back, because a baby lying on its back can feel them.