It depends on the position and depends on the company/locale. It's very possible in Silicon Valley that you get interviewers judging engineering candidates because they dressed up too much. [Have to have that culture fit, you know.] At most companies, and certainly for non-engineering roles, it almost certainly doesn't hurt to dress up a bit and is considered normal.

At most companies, the CEO's profile picture will have be in a suit, so the heuristic still works.

Exactly.

If the CEO dresses in a T-shirt and jeans, there's a _very_ high chance everyone else would be dressing the same or less formal.