I'm not sure about 17th C Sweden but there were similar laws in 16th C England. The Sumptuary laws were passed at various points during the entire Tudor dynastic reign. For the most part, the laws were to re-enforce social status; however, there was a clause in the Sumptuary laws that got abused like anything. The clause stated that if the item was a gift from someone of a higher position and the person in the higher position was allowed to wear that item, then you were too. So if the Queen gave you a purple silk dress with sable trim and you were just the chambermaid, you could totally wear it.

The punishment for dressing above your station was typically a fine. Dressing above your station was seen in the same way we see rules in a HOA today - some are meant to be broken. Also, just like in an HOA today, it's not likely the cops will stop you, it's your neighbor that you don't like down the street that will turn you in for the fine. Of course, you could turn him/her in for a fine later when that neighbor wears something you don't think they should have. :-)

Sweden had sumptuary legislation regulating clothing on the books from the 15th through the early 19th centuries. (Technically, sumptuary laws regulated consumption in general, and Swedish laws appearing in the later 14th century were made with respect to other forms of consumption.) The 15th and early 16th century laws were aimed at distinguishing moral and immoral women (a thread which continued through the 17th and 18th centuries) rather than class distinctions, especially with regard to weddings and what pure and impure brides were allowed to wear, although women who transgressed other standards of feminine behavior could be sentenced to dressing in the clothing intended to mark "immoral" women. It was not until 1644 that laws were passed regarding both women's and men's dress, and which involved economics - but it must be noted that these laws were only applicable to the aristocracy. By the 1660s, other orders of society were becoming involved. And the idea was to prevent them from getting involved in excessive conspicuous consumption, to keep markets regulated (if the burghers were all buying the best fabric, prices would rise and aristocrats might not be able to afford it for themselves), and to stop the import of dangerously luxurious foreign goods or simply the "foreign" taste of luxury in general as much or more than it was to make one's social status visible at a glance.

In the case of women who violated the sumptuary laws regarding their morality - that is, women dressing as though they were moral when they were not - the sentence was the pillory. The laws regulating social status can be seen to have been broken often, going by probate records, so the consequences were not much of a deterrence. In some cases, as with hooped petticoats in the 18th century, there wasn't so much a penalty as a tax. In others, it was a fine. You can see why the laws were so often broken: if you can afford to purchase expensive foreign imports and the newest luxuries, you probably don't have much or a problem paying a fine on the off-chance that someone turns you in for it.