That seems to be late in Luciano's life, in Italy. Considering his limited mobility due to constant surveillance at that time, it's plausible he'd go casual with his wardrobe. Flashiness was never his style. He wanted authorities to think he was just an old guy retiring. He's looking the part.
"...the successful annihilation of organized crime's subculture in America would rock the 'legitimate' world's foundation, which would ultimately force fundamental social changes and redistributions of wealth and power in this country. Meyer Lansky's dream was to bond the two worlds together so that one could not survive without the other." - Dan E. Moldea
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