In my experience with operational upgrades with Qantas, the computer has already processed the upgrade long before the traveller arrives for checking. I gusss if you were really sloppily dressed the checkin agent could over-ride the upgrade and put you back into the paid cabin, but unlikely. There are plenty of paying business and first class passengers who travel "comfortably".
But I always travel in neat clothes. I feel better wearing something presentable. Not a suit (unless going straight to a meeting), but neat slacks (eg Dockers, not jeans) and non-iron button shirt with collar. But that has not helped to get operational upgrades on Qantas international flights
.