Most of the parents don't really care about it, but we don't want to stomp all over the kids' feelings either.
When this sort of thing happens, even if parents don't care much about it, there is a big focus on dressing up and appearance. Most of the kids were in fancy clothes and there was a lot of makeup, new haircuts, and extra polish evident.
Pinkie Pie wanted to just wear her normal tshirt and leggings.
Most parents would forbid this. I am not most parents.
In fact, I quite like the idea of her refusing to put on a culturally mandated costume for this event, and I quite approve of wearing normal clothes. I did have some worries eating at the back of my brain though. I was concerned that other kids would make fun of Pinkie Pie's lack of dress clothes. I was concerned that she would end up feeling uncomfortable at a table full of fancied up kids in her normal gear.
My solution to this was to tell her she could wear whatever she wanted but that other kids would be dressed up fancy. I told her that she would probably stand out. I made completely clear that she was welcome to wear whatever she liked though, and that I personally didn't care.
She chose to go with her regular clothes and as far as I know nobody said a word about it. If I had seen them give her grief I would have been really tempted to step in and crack some heads (by which I mean I would tell them they are terrible people) but I saw nothing of the sort and Pinkie Pie came home at the end of the evening quite pleased with everything.
Even if they had given her grief about her clothes though I would not have regretted my decision to let her pick her wardrobe. You have to learn these lessons yourself at some point or other, and learning them in grade 5 is a relatively low impact spot.
After the grad she went out to a restaurant with her classmates without us and came home telling us of all the wonderful things that the Mandarin restaurant serves.
I suspect many or most parents would be a little sad at watching their kid grow up like this. Graduating to a new school and going out for dinner without us is a couple of new steps all taken together. I LOVE it.
It makes me happy to watch her grow and mature. I like her every step into independence and freedom and being herself, away from us. Fly, little unicorn, fly!