What’s a “dissipated” garment supposed to be?

"Just one thing", said the tailor. "A touch to your waistcoat". He unbuttoned the dissipated garment and did it up again more symmetrically.

I've looked up the word dissipated and still I can't seem to understand what it means in this case, when used with garment.

Although nowadays we mostly use it to describe smoke, gas and liquid, the word 'dissipate', meaning disperse or scatter, can be applied to other materials. According to Etymonline it derives from the Latin dissipare "to spread abroad, scatter, disperse; squander, disintegrate."

The author is using it to describe a waistcoat that is buttoned up wrongly. It has spread abroad and disintegrated: lost its cohesion.

Paul Johnson identified the source of the paragraph from the story "The Tillotson Banquet" included in the collection "Mortal Coils" by Aldous Huxley. http://www.online-literature.com/aldous_huxley/4447/

In this case dissipated means terribly worn. Here are previous descriptions of the suit, which was retired several years earlier by the butler (Boreham).

Boreham was one of those immemorial butlers who linger on, generation after generation, in the houses of the great. He was over eighty now, bent, dried up, shrivelled with age.

"All old men are about the same size," said Lord Badgery. It was a comforting theory. "Ah, here he is. Have you got a spare suit of evening clothes, Boreham?"

"I have an old suit, my lord, that I stopped wearing in let me see was it nineteen seven or eight?" [in the story it is 1913, so five to six years ago it was replaced and left to age in the closet.]

"That's the very thing. I should be most grateful, Boreham, if you could lend it to me for Mr. Spode here for a day."

The old man went out, and soon reappeared carrying over his arm a very old black suit. He held up the coat and trousers for inspection. In the light of day they were deplorable.

"You've no idea, sir," said Boreham deprecatingly to Spode you've no idea how easy things get stained with grease and gravy and what not. However careful you are, sir—however careful.

"I should imagine so." Spode was sympathetic.

"However careful, sir."

"But in artificial light they'll look all right."

"Perfectly all right," Lord Badgery repeated. "Thank you, Boreham; you shall have them back on Thursday."

"You re welcome, my lord, I'm sure." And the old man bowed and disappeared.

On the afternoon of the great day Spode carried up to Holloway a parcel containing Boreham's retired evening-suit and all the necessary appurtenances in the way of shirts and collars. Owing to the darkness and his own feeble sight Mr. Tillotson was happily unaware of the defects in the suit.

...

On the other hand, Boreham's out-worn evening-suit was simply buffoonish. The coat was too long in the sleeves and the tail; the trousers bagged in elephantine creases about his ankles. Some of the grease-spots were visible even in candlelight. The white tie, over which Mr. Tillotson had taken infinite pains and which he believed in his purblindness to be perfect, was fantastically lop-sided. He had buttoned up his waistcoat in such a fashion that one button was widowed of its hole and one hole of its button. Across his shirt front lay the broad green ribbon of some unknown Order.

"Queen of the tambourine, the cymbals, and the bones," Mr. Tillotson concluded in a gnat-like voice before welcoming his visitor.

"Well, Spode, here you are. I'm dressed already, you see. The suit, I flatter myself, fits very well, almost as though it had been made for me. I am all gratitude to the gentleman who was kind enough to lend it to me; I shall take the greatest care of it. It's a dangerous thing to lend clothes. For loan oft loseth both itself and friend. The Bard is always right."

"Just one thing," said Spode. "A touch to your waistcoat." He unbuttoned the dissipated garment and did it up again more symmetrically.

I think it's poor writing myself. I believe that because the waistcoat wasn't buttoned properly, the author is connecting it to someone who is 'dissipated' -- spending extravagating on pleasure, or overindulging in pleasures like excessive drinking.

It's a stretch. The person couldn't button up the waistcoat correctly because he was drunk or in a hurry because the spouse of the person he was dallying with came home unexpectedly, so the garment takes on the characteristic of the person wearing it.