I've been making clothing for this mod from the bottoms template in the flash file you provided, which is extremely helpful, but anything I draw on the chest layer ends up above the new thighs in-game. I've been drawing around it, but is this normal? The chest layer still stays beneath the vanilla thighs as normal.
This is because SDT uses an ad-hoc layering hierarchy. Chest clothing is drawn above the thigh. The game applies a Mask to chop off any chest stuff whenever it threatens to touch the thigh. But the Mask is shaped specifically for the vanilla thigh. So you'll need to include an edited Mask with your thick-thigh clothing mod.
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https://www.undertow.club/posts/153982/