When people talk about what they are going as for Halloween, if someone says "You two are going to costume jail for life", what does that mean?
In what context did you encounter this sentence, yanx?
I suppose the speaker meant that their costumes were so extremely bad that they deserved a very severe punishment.
I agree with Probus - the only reason (if what the Thread-starter is saying is true) someone could be sent to "costume-jail" is the person's poor outfit.
Someone has missed out the more common "costume-police" before inventing "costume-jail". Actually 'costume-police' isn't that common either, but it is common to add '-police' to describe people who make sure everything is legitimate, like us grammar-police. 'Fashion-police' is also common. It's usually a derogatory term, like most 'police' derivatives.