To start, I know hair doesn't count as clothing but I have found with my hair it is best to wear a low bun. A high pony tail doesn't feel good when you're on your back and if your hair isn't in a bun you can end up lying on the pony tail. A long pony tail and l hair can get in your face. A stretchy head band can help keep the hair off your face if it's too short to pull back and if you attend a high-pace yoga class absorbent headbands are a good idea to prevent the sweat making its way into your eyes.
If the neckline of your top is too big not only will it reveal more of your chest than you might like, it could hit you in the face which I find annoying and distracting, and it could obscure your vision. Proper alignment in yoga not only prevents injury but increases the effectiveness of the pose so until you're incredibly aware of your body placement you probably want to be able to see where your hands and feet are. Being able to fix your gaze on an unmoving object also helps with balance. If you don't believe that do a little experiment by timing how long you can stand on one foot with your eyes closed and with your eyes open.
In any pose where you lift your hands if the the torso of your shirt is too short you might reveal muffin tops, spare tires, ribs, tattoos, belly buttons, or piercings you'd prefer to keep covered (and warm). Similarly, if the waistband of your top is too loose it is going to come up to your ribs, chest, or arm pits when you do an inverted pose.
If your sleeves are too long and/or wide you are likely to accidentally put your hands or feet on them. If you end up putting your hand down on the cuff of your sleeve rather than your yoga mat or the floor you're likely to slip. If a foot comes down on a wide sleeve no only could you slip but your hand won't be free to jut out to prevent a fall. Though you're not likely to get a large injury from most slips and falls in yoga it is quite easy to pull muscles and we all know how annoying that is. Similarly to shirt sleeves, pant legs can't be too wide or long or you're likely to step or sit on them. You may not slip or fall but you will look silly and be annoyed and distracted as you constantly tug at your pant legs.
Like the waistband of the shirt, a well fitting waistband in the pants will help you enjoy your yoga practice more. If the waistband on your pants is too loose it could gape as you move through the poses and can easily be pulled down in some poses. It's annoying to always be pulling your pants up and of course you can reveal more than you'd like. Thankfully I haven't accidentally showed too much but I have been in classes where I saw a little more of classmates than I'd like.
Part of the layering I like to do for the relaxing savasana at the end of class is a fluffy pair of socks. I'd recommend you not wear socks for your practice (for the same reason I recommend you invest in a yoga mat rather than use a blanket or practice on carpet) because it is too easy to slip.
It's hard to say discretely but if the seat of your pants is too loose you might end up giving yourself a bit of a wedgie which isn't easy to get out of discretely when most of the class is in one position and you're in another, fussing with your backside.
Though I like to head to class wearing layers to remove as I get warmer and put on again for savasana at the end of class, I find layers get in the way once I'm moving much. This is the same reason I don't like to wear very thick or loose clothing for my practice. In lying or seated poses you will move but your outer later of clothing will not. You'll end up with twisted clothes you need to unwind before moving into the next pose. This isn't so annoying in something like a yin class where fewer poses are held for longer but it's harder in in any class with a flow where you want to move seamlessly (pun intended) through a series of poses.
I like to incorporate a little bit of cardio into my yoga which works up a bit of a sweat. For this reason I like the new moisture-wicking fabrics. The relaxing savasana at the end of class wouldn't feel so great if your clothing was cold and damp.
I also recommend fabrics that are smooth so your limbs can glide against each other without too much friction. Wearing a textured fabric is similar to wearing too many layers. You want your clothing to move with you to stay safe, comfortable, and focused on your practice.
Some instructors prefer you wear a certain type of clothing (one of my instructors likes to honor purity by having mostly white clothing in class) but that information will likely be on their web site or they will mention it when you sign up. One of the reasons I love teaching yoga is that I can create an environment where we embrace individuality so I like to see personalities revealed in clothing so anything goes in my classes!
Finally, if you are planning to go to a class I highly recommend you check the sheerness of your clothing and inspect the crotch of your pants for any holes because I'm guessing you probably don't want to accidentally reveal your root chakra!
As with everything in yoga I simply advise doing what works for you (yoga for you!) in a way that shows respect for others.