I mean, I wouldn't go so far as to say the 'truly wealthy' wouldn't fathom such things. There are people who are very spendthrift in some aspects of their lives, but choose to splurge on a couple things because it brings them joy. For some, this means a nice car. For some, it means a nice handbag. The person buying it specifically to keep up with the Joneses may not even be rich.
I think the other person was confused with the definitions of rich, wealthy, and ultra wealthy.
Rich people are basically money in and money out people. They are not wealthy because they spend too much. They are not in debt but they are also not millionaires either.
The wealthy want to see their money grow. They know that the ugly $3500 LV purse will do nothing to make their money grow and since they already have a lot of money, they don't need to buy the ugly bag, which is really just a status symbol, to prove anything. They might buy something more reasonable and use the $3500 to purchase some other asset that actually generates more wealth.
The ultra wealthy, and these are the top 1% will buy whatever they want because they can afford anything they want essentially. That's not a lot of people though. Mostly celebrities and people like Elon Musk.
It kinda makes sense when Dave Ramsey says that you have no business buying a new car unless you have $1 million in the bank. It sounds ridiculous but it actually makes sense.