Cast Members are part of the “show,” but they’ve always been only minimally part of the theming. This is by design- the function of CMs is not just to help with immersion, but to be guides, hosts, and authorities.
A CM who is totally in character as a pirate, for example, might not be taken seriously when giving evacuation orders during an emergency. It would be confusing if a CM went from play-acting to enforcing park rules.
CM costumes are designed to establish them in these functions. They are on-theme, but also make them easy to identify, somewhat comfortable, safe, and don’t get in the way of CMs doing their jobs.