Here's the actual dress code:
Wear appropriate clothing for that day's lab (which we obviously know ahead of time from blackboard). If its focused on lower extremeties, a sports bras isn't required. If its focused on the spine, expect to take your shirt off. It all depends.
My thoughts:
If you are a guy and you don't want to take your shirt off in a lab, apply somewhere else. If you're a girl, and you think that its sexist to have to wear a sports bra, apply somewhere else. If you believe you are fat (regardless of the norm), and you won't let someone practice on you, apply somewhere else!
I have had partners who believed themselves to be too big, and would not let me or others practice OMM on them, when its required. No one looks down on them for being bigger, if they are or arent. People look down on them for being bad partners. If this is you, don't apply, to Touro, or other DO schools.
As for pass/fail, its not, its letter grades.