A§) Put some new clothes on, soon enough.
B§) Will go naked, forever.
And if it's B.
I am a bit disappointed and it will become a very naked world in the end if there is no "brain function" for NPC to get dressed again.
Because I remember Bethesda talk so fondly about Oblivion, how the NPC has routines and they would eat, poo, do all that they needed and pick up things they saw.
But if it's A!
I'm happy, nothing to complain about.