Twitch is updating its policy on attire and nudity in an effort to help streamers better understand what is and isn't acceptable on broadcasts. While the past rules and guidelines were focused on which garments were appropriate, this updated policy puts a greater emphasis on coverage.
The guidelines explain which parts of the body (on both males and females) can be visible and which cannot. As it stands, most of these rules were already assumed to be part of Twitch's rules and so it shouldn't come as much of a surprise. In truth, it seems more like Twitch wanted to outright say what to cover, rather than leave things up to the streamer.
Whether it be partial or full nudity, or even the impression of nudity, Twitch wants to make it clear that these elements are not acceptable on a broadcast. However, there are situations where Twitch will make exceptions, if the attire is appropriate for the situation.
For example, body painters, IRL streamers at beaches/swimming pools, and breastfeeding are all situations where more exposure is permitted. Nudity is still a no-no but Twitch wants to ensure that the streamer does not sensationalize any part of the body that may be more exposed than it would be in a normal stream.
Ultimately, Twitch issuing these rules won't do much to assure streamers about their enforcement. Even when rules are pretty clear in Twitch's TOS (Terms of Service), enforcement of those rules can vary from situation to situation. For example, one streamer may be banned for several days for an accidental wardrobe malfunction, while another gets away scot-free.
Consistency is part and parcel with clearly communicated rules and that's where Twitch seems to fall short. At the very least, though, the Twitch streamer community has clearer guidelines to look to when deciding what is and isn't okay.