Dressed too casually for where you are. Everyone else is in a suit or a nice dress, and you came in jeans and a T-shirt — you are underdressed. It is about the level of formality, not about the amount of cloth on your body, and this trips people up. A person in shorts on a hot beach is not underdressed; a person in shorts at a wedding is. The word almost always carries a feeling of mild embarrassment, and people usually use it about themselves: 'I felt so underdressed.' You will also hear the opposite, 'overdressed', when you are the only one in a suit and everyone else came in shorts — and in many cultures, including Taiwan, being overdressed feels safer than being underdressed. Note that native speakers do sometimes use it loosely to mean 'not wearing enough clothes for the cold weather', though the formality meaning is the main one and the one dictionaries give.

穿得太隨便、不夠正式（跟場合不搭）。不是「穿太少」的意思——重點在場合的正式度。