Nude tag help

Hi, I've tried finding the answer online but can't find it so I apologise if this has already been asked. I'm changing tags on some cc to make them show up in more accurate categories in CAS. I'm a little confused by the 'nude' tag. Does checking this mean a sim will be seen to others as being nude and get the embarrassed moodlet or does checking it mean that that item will show up even when they are nude, so like in the shower for example? I have some nail varnish that I'd like to not be removed when the sim is showering so was wondering if checking nude is the way to make this happen. Sorry if this doesn't make sense and thanks in advance for any help!