Okay, no. Calling the bs right now.
First, that's not merch. That's one of her most famous costumes from the You Belong with Me music video. Just to get that out of the way, it's not available for sale anywhere.
Second the city projected it on the christo redentor while she's performing live there. For fun. Similar to how the mayor of Glendale named the city Swift City for the day or Vegas lit up the arches as her albums.
The video is obviously made by someone who just wants to stir up shit and controversy when there is none. You want to be mad at Taylor? Choose a legit reason, but don't try to just make controversy up.