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Not quite evil. Or at least, not enough for the audience to worry too much. The essence of this prop is evil in a Camp sort of way, often bordering on 'dark' but safe fetishism. This often just means cooler and sexier costumes, and slightly more aggressive characters. Especially handy if you prefer a Dark Prince to a White Prince.
Occasionally, Fashionable Evil occurs because Generic Cuteness permeates the entire setting, like a ghostly hell dimension suffused with fluffy purple things and Cute Monster Girls instead of actual monsters. The setting also supplies its own Anti Heroes, and since evil is the Informed Ability, these characters can be antagonistic if not outright malicious when needed.
Usually not result of Villain Decay, as their popularity is predicted, especially if the story itself uses a non- Big Bad centered conflict. See also Dark Is Not Evil. Don't confuse with Evil Is Stylish.