I'm on a similar journey. I think there is a limit. If I have 20 nice coats, buying another one probably won't have an impact. However, if I feel like "I don't have a nice coat", and hate putting on the coat I have, and feel a bit embarrassed to be seen in it - then yes, buying a nice one WILL make a difference.
Also having choice: I have a nice brown bag, but not a nice black bag, so I keep making compromises (e.g. mismatched outfits, taking the black bag i don't like). Again, here i think it makes a difference.
I think this principle can be applied to other things: skin care, a nice candle, a meal out.
However, what you said in your post really resonates. I find the balance difficult - I'm someone who used to have issues with spending when I was younger, then I went very low spend for 10 yeas and it worked for me, and I didn't miss most things. But now I'm at an age, and have a financial security, where I can invest in beauty again, and want to be more deliberate about my image and how I show up.
In terms of stopping, I set a budget for truely discretionary (e.g., I will buy one designer handbag this year), and am more relaxed about everyday - none of my jeans fit properly, I will buy two pairs of jeans i love. I still don't shop as a hoby or buy things on impulse, most spends are planned and deliberate based on what I feel I "need". If it's an event (e.g., work Xmas party, wedding, birthday) I try to reuse what I have first before decided whether I really need something new as these will be low use items.