Reporting a villager's clothing to Isabelle is supposed to revert them back to their default, but afaik it's a broken feature. It only lasts temporarily (if it does anything at all)...
But good news--if it's not an item they love, they'll eventually gift it back to you, I believe. I got Dom from a friend and he had some ugly clothes that were given to him... and he gave them all to me at some point lmao. But Zell--who I've had for much longer still wears the shirt I gave him, so I assume it depends on how much they like the clothes?
If it's a custom design though, you might be out of luck. I haven't been able to get other peoples' designs off my villagers...
Edit: As a tip--if you're unsure about what clothing would look like on a villager, you can go to Harvey's island and have them try on the clothes there! Helps since Isabelle is broken lmao