The exquisite clothes are a quest item used during The Giant Dwarf quest. Vermundi will make them for 200 gp once the player helps her repair her steam-powered sewing machine with a coal, logs, and a tinderbox. Along with the repaired Dwarven battleaxe and the exquisite boots, they serve as clothing for the model for the new Giant Dwarf statue.
Once the player has obtained the clothes, they can be delivered to Riki the sculptor's model. If the player instead attempts to wear them, they receive the message, "These clothes are too small for me, I might ruin them if I put them on. I'd better take them to the sculptor instead."
You can get an extra copy of these clothes for an extra 200 coins during the quest by dropping it getting another one, quickly giving them to Riki the sculptor's model and quickly returning to pick up the one left on the ground.
The update history project is a work-in-progress – not all updates to this topic may be covered below. See here for how to help out!