I understood the reason behind her wearing those bands around her neck and wrist, when the director of the mental hospital revealed she had scars in her wrists and neck. She used those bands to cover those scars. But I could not understand what could be the reason behind her wearing weird dresses all the time. We saw her wearing a particular type of dresses instead of wearing casual dresses to go to school. Besides that, she all the time wore that type of dresses. I think she wears the particular type of dress for a specific reason. What could that reason be?
Yes, there is a reason for it. As I remember while watching the movie, Esther is a woman so she has well developed breasts, which she hides by wearing body wrappings. And normal child clothes will show the body wrappings easily because they have thin fabrics compared to the thick fabric dresses that she wears.
Esther's dresses all feature the Peter Pan collar, which makes her seem like a little girl, when she is actually a woman with hypopituitarism (a condition that stunts physical growth). Because she is a 33-year-old trying to pass herself off as a little girl, she wears little-girl looking clothes. Remember that she was a prostitute in Russia servicing pedophiles, so this was probably a look she cultivated. (And she's not exactly sane, so that too could have contributed to her choice.)