What to do with a student coming to class in revealing clothing, to the degree that it disrupts the teaching environment?

Unlike my answer here, your problem does not seem to be about the clothing, but rather the disruption. Assuming the student is not breaking the university dress code, then it is not her who is disrupting the teaching environment, but other students.

You have not provided examples of how the response of the other students is disrupting the teaching environment, but the solution really doesn't matter that the cause of the disruptive behavior is the appearance of another individual. Simply remind students that the disruptive behavior (talking, hooting, leering, taking photos) is disruptive and will not be tolerate. If the students continue to be disruptive, throw them out of class.

The best thing you can do is the escalate the problem to your superiors, which you already did. Note that in disputes like this (when there is a bad and a worse choice, like you being accused of being either a harasser or a perv) the important thing is to let know your employer that there is a problem. That may be very important for your defense if you are forced to intervene if she starts to behave even more provocatively. So make sure that you have indisputable proof that you notified your superiors of a problem early.

Perhaps I would go even further. If you live in a liberal EU country, you may have dedicated university services taking care of sexual harassment, gender equality and similar. If you feel uncomfortable with her behavior, turn the tables on her, and go to the sexual harassment counselor and notify them. Gender equality goes both ways! If you (or your male students) would come into class in spandex swimming trunks, exposing the outline of your genitals, I believe the women in the audience would rightly feel this is inappropriate and constitutes harassment. So go to the counselor and report the situation. The counselor will have perhaps more knowledge how to tackle this or even she (it is probably a woman) will take the matter into her own hands.

As with your superiors, this may protect you if the girl starts acting even more unreasonably and you will have to intervene on short notice.

Probably you get here the subtlety of my situation: If I intervene, the student may consider I'm harassing her; if I don’t, I could become that perv TA who likes peering at his student.

In fact I don't get the subtlety of your situation. Attempting to impose limitations on a student about how they dress is indeed ramping up to a kind of harassment. If you agree that she has the right to wear the clothing she's wearing -- and I think you do -- then your attempts to interfere with this can only be more or less bad: you really don't have a leg to stand on. On the other hand, it is definitely okay to look at your students. You are not obligated to successfully pretend that a student wearing a bikini is actually wearing a business suit; rather, you are obligated to treat them fairly and professionally. You are not going to be convicted of the crime of looking at your student's body, because that is not a crime. Not only are you allowed to look, but liking what you see does not make you a "perv." So the horns of your dilemma are quite unequally sized.

By the way, it is not like dressing provocatively is an ingenious evil plan of your student's own innovation. People of both genders have been doing that, in different ways, for a long time. It is something that people can do and that deserves an appropriate response like other forms of behavior. I urge you to think about your response to the student's behavior and also the other students' responses to it. You can, and should, respond in a way that makes clear that the student's clothing is not going to interfere with your successful academic interaction with her or make you worry that you are yourself behaving improperly or "pervily." When you are confident enough about your own response, you will be implicitly modelling the correct behavior for the other students to follow. I think you have some room for improvement on that:

I am starting to think it may cause issues outside the classroom too. Recently, during my office hours, one student asked me my opinion on that situation, to which I replied that I had “no comments” (the student didn’t had the authority to ask me that and I am supposed to remain non-judgemental.) Then the student told me rumor has it I haven’t intervened because I enjoy watching the student expose herself.

Please look back over this. Do you see that you modeled your own lack of comfort with the situation to the other student? In particular, you let loose a whiff of fear that you are somehow behaving salaciously by not shutting down the student's behavior, and the student reflected that back upon you. When this happens again, you absolutely should be willing to talk to the student about the situation. You can say much of what I said above, and in particular you can talk about how the other students do not need to pretend that the student is fully dressed. They can even like the way she is dressed. [Added: I think that some are misinterpreting this. I don't mean that the OP should discuss the student's attractiveness with the other students, or encourage or participate in that discussion in any way. I'm just saying that if the OP or some of the other students find this student to be attractive then that is not inherently problematic or something that needs to be avoided. I said this because both the OP and some of his students seem to think that it is inherently problematic, or "perv"y.] But they can't let it interfere with the course or with their learning.

By the way, I want to point out the existence of a much more advanced level of instructor-student jujitsu in which the instructor can actually talk with the student and get her to understand why what she's doing is almost certainly not in her own best interest. But that's black belt stuff compared to where you are now: i.e., don't mess with it, someone could get hurt.

Ignore everyone here and ask your higher-ups what to do. Then do it.

And get at least some of the responses in writing so that you can point back to them.

I believe this is the only correct and safe way to proceed. End of story.

I think that it is useful to view your dilemma from a worst-case scenario perspective.

Trying to intervene and the student then complaining about harassment/freedom of expression/etc., may (conceivably) lead to adverse professional consequences for you. For example, she might make a formal complaint with the risk that you are not employed again as a TA.

On the other hand, not intervening leaves you open to the somewhat indirect accusation that you didn't do something because you enjoyed her dressing as she does. I too would hate to think such a view was incorrectly held about me, but it is hard to see how much can come of it. Particularly, because one can easily imagine that your head of department, etc., will have no difficulty in understanding why you didn't intervene.

There are, of course, consequences for your students too, but as @StrongBad suggests they are responsible for their leering, not you. If they genuinely feel strongly about her dress, as opposed to it being a source of entertainment, and they can articulate a good reason why they do, then they can complain to someone up the hierarchy who may be in a more secure position from which to intervene. You might even consider subtly encouraging them in this direction.

Meet the problem head on. Take a couple of minutes to talk about it. Remind your students that in this country (whatever country that is), students have the right to dress as they please, and if anyone has a problem with that, it's their problem, not the person with an unusual outfit's problem.

The most important thing is to convey a firm commitment to individual liberties and gender equality, and your expectation that everyone in the class behave in a supportive way to all their fellow students.

If you want to include some gentle humor to break the tension, that would be okay. For example, in my case, I might share a memory of Professor R. who expressed his individuality by wearing a suit and tie, on teaching days and office days, alike: three-piece, dark wool generally, but with a switch to light blue seersucker on Memorial Day. That was just his style. To each his own, and who am I to tell anyone else how to dress?

Or you could mention that if Imelda Marcos paid her tuition and met the prerequisites, she would be welcome in your class, along with her entire collection of shoes. (1220 pairs!)

(Ignore the rumors. There will always be silly rumors about instructors.)

You say that you've talked to your department head about this; make sure you get the answers in writing to protect yourself. A student who changes into a bikini once she enters the building is a very different situation than a student who wears normal but revealing street clothes to class - make sure this information is included in your letter to your department head.

As you are aware, there is a fine line in enforcing dress codes -- nearly all school dress codes focus on limiting the freedom of female students to protect male students from distraction. Your bikini-wearer is deliberately pushing the boundaries. (I can't imagine that swimwear is allowed in class -- perhaps the situation has never come up before?)

If your male students ask privately, simply say that you're unfortunately not legally allowed to intervene. You may want to suggest to the most distractible students that they sit in the front rows to avoid having the bikini in their line of sight.

Does this student wear revealing clothes to other classes, or just yours?

The situation is indeed delicate and I can see why you want to be cautious. Whatever action you take could either result in people responding reasonably or in a shitstorm of biblical proportions.

I think a classroom is equivalent to a professional environment where a certain type of behavior favoring work and learning is socially expected. This applies to both men and women, obviously. But you being a male, her being female you can't possibly make a comment without giving the flank to a political reaction.

The rumors about you are annoying of course, but they are much safer to live with. In short, at the individual level, you only have one safe alternative.

What you could do is lobby to have the school create a simple dress code to prevent future similar cases.

I'm somewhat surprised this hasn't been stated yet.

Wearing a bikini to class is inappropriate.

Period.

Just as wearing shorts, sandals and nothing else would be inappropriate. The classroom is not the place for swimwear.

This should have nothing to do with sexism, or with harassment (though I certainly understand why you're worried about that). It has nothing to do with "the students are at fault for noticing". It has nothing to do with "but men could do it" (no, they couldn't). It is not a case of "it's the mens' fault for suggesting that she was asking for it" (ridiculous).

Wearing bikinis, or transparent tops, or just bras is so obviously not okay. If I were in that position, I would feel quite within my rights to invite the student to my office and explain that she is in a semi-professional environment and is expected to dress accordingly. Besides everything else, she should be showing a little decorum and a little respect for you, the teacher. If she feels that's "harassment" then, frankly, bring it on. I can't imagine you'd lose that fight.

Whether that's something that works for you, in your culture, at your institution, in terms of the risk of fallout, I cannot possibly say.

But think of it this way: what would happen to her if she wore that to work?

Go from there.

Generally in professional environments, there is either an implicit or explicit prohibition on men commenting on how women are dressed. You are encountering that in the answers you are getting. That being said, this update to the question caught my eye:

We are in winter now, so she comes fully clothed, changes her clothes once in the building and always (clothed or not) sits on the first row so everybody sees her. Outside classes, she is fully clothed. Her behavior is 100% intentional and she knows that when wearing that kind of clothes the environment of the class will accordingly change.

To me this implies that the student is explicitly behaving the way she is in order to elicit response, either from you or the other students in the class. The fact that you mention a student asking about the situation implies that other students are noticing the disruption from the classroom norms.

Unfortunately as Pete L. Clark mentions, directly counseling the student on the fact that their behavior is against their own best interests even if it is explicitly permissible is very difficult to do without a lot of practice. I would advise you bring the situation up with the department chair and relevant university authorities to guard against an potential complaints against you. Additionally, you may want to reach out to your colleagues to see if one of them can approach the student to see if they can find some insight into why the student is choosing to dress in such a matter.

"The school doesn't have a dress code, we simply expect students to conduct themselves professionally. Unfortunately it appears that you come to class occasionally dressed in a manner which distracts attention from the lesson to you. I've discussed this disruption with my superiors at length. We don't want to infringe on your personal expression. We also don't want the other students to be distracted. We don't believe the distraction is intentional, and perhaps you're surprised to learn of it now. Regardless, we have to come up with a solution that is reasonable and fair for everyone."

From there the discussion will depend on what she says. I doubt you'll need to prompt her to contribute her perspective, but if you do you might ask whether she needs help understanding the cultural norms of those attending the class, or simply ask her what her thoughts are.

If she becomes defensive, it sounds like the university doesn't provide you with much support in this case. It might be best to simply say, "I understand you aren't breaking any rules, and I cannot ask you to change your behavior. I"m hoping you understand the issue, and I will continue discussions with school officials to find a solution."

If she is amenable to change you might consider solutions such as sitting in the back of the class. If she wants to help but simply doesn't understand what outfits are distracting you might be able to come up with a word or action (putting a pencil on a specific spot on the table or lectern in front of you, for instance) that would encourage her to move seats if she actually is causing a disturbance.

Without specific knowledge of the university's policies, though, there's little else that can be recommended.

Having the discussion and understanding whether she understands the situation and is interested in changing is probably the key to the type of discussion you're hoping to have.

I'd strongly avoid mentioning specific outfits, or trying to draw lines between appropriate and inappropriate. Always keep the discussion away from boundaries and focus on the fact that it's disruptive to the class. You should be prepared to explain what the class does in response to her outfits that demonstrates the disruption.

If the situation doesn't improve, and you can't simply wait out the semester, discuss further options with your superiors. You should be able to take some actions for the benefit of your class at your discretion, for instance having assigned seating throughout the class.