The difference between those two side-by-side pictures is the body, not the tightness of the outfit.

Incorrect. Well, you are right in that the body proportions on the right are off compared to the overlay which exacerbates the discrepancy (we'll circle back to that), but the tightness is absolutely different.

Where do you see a bunch of loose fabric in that oufit's torso?

I'm using the bottom photo, with the "skinny" overlay for reference.

Basically the entire white triangle at the far left (her right) above the waist is loose. If you mark her waist at the halfway point between the "skinny" sketch and the photo, that's where her actual waist is. The right (her left) side isn't as egregious, but a significant fraction of the gold portion between the skinny sketch and the photo is loose.

Add to it that, especially with the sequins, the outfit is a relatively thick material, and the discrepancy starts to fade.

Do you actually think Taylor Swift is swimming in that outfit since she's actually as skinny as she was 13 years ago?

I really don't know what you're asking here. I think that the areas where the outfit is loose (at least looser than the skintight skinny sketch) make her waist and torso look bigger than it actually is.

Of course a picture of a much skinnier Taylor Swift will look skinnier than one of a less skinny Taylor Swift.

This is my point. It's only "much skinnier" and "less skinny" when it's a comparison. I'm by no means skinny, but I'm much skinnier than fat people. "Much skinnier" Swift is arguably skinny, "less skinny" Swift is indeed less skinny than skinny Swift, but she is not skinny.

But that has nothing to do with the visual illusion described being apparently dishonest, which was your last assertion

Let's address that directly then. Leaving semantics aside (since I would barely qualify the skinny sketch as "skinny" anyway) the looseness of the outfit that obscures her actual figure gets us about halfway to matching the sketch to start. But that's just one of several factors that contribute to the "illusion". The other factors can be attributed to the pose and scale.

In the original photo, Swift is mid stride. The rotation of her shoulders is notably more extreme than the sketch, which makes them appear narrower as a reference, and that screws up the proportions. Look at her right (our left) shoulder with the overlay, the angle isn't even close between the two, either rotationally or vertically.

Her head is also bent down, making her neck look shorter, which is not reflected in the sketch, further screwing up the proportions throughout the whole thing.

And then the knees. The very top of her patella is below where the very bottom of the sketch's patella would be.

So the shoulders are lower and less angled in the sketch than in the photo, the knees are higher in the sketch than in the photo, and the head is angled in a way that hides the length of the neck. Taken collectively, this is clear evidence that the skinny sketch is scaled too small in the overlay.

If you scaled it up to actually match her body in the photo, and accounted for the looseness of her outfit around her ribcage, the illusion is negligible. The illusion comes from choosing a highly dynamic pose, not reproducing the pose faithfully, and making the outfit in the sketch skintight when the actual outfit is not.

I can't speak for the purely argumentative neckbeards, but I have seen many women of many body shapes both clothed and unclothed, and autistically recognized the difference in silhouette. Additionally, I've done a fair bit of research into anatomical sketching and sewing; more than I've done actual sketching and sewing unfortunately, but I can recognize the relevant issues.

This "illusion" comes from a number of small discrepancies that add up to something that looks significant. Additionally, it is a single, still and, I reiterate, highly dynamic picture. We've seen a thousand pictures and videos of Swift, which means we can construct a mental model which accounts for various outfits and poses.

I didn't want to be mean to OOP, but this is a skill issue as an artist, and a very poor choice of photo to make this point.