IrishRed, your post made me chuckle. My father is Hannoveraner but his entire side of the family has holidayed in Upper Bavaria for more than fifty years. One of his favourite items of clothing is a leather Trachten vest.

Definitely however one finds Trachten more commonly in the smaller towns in Bavaria, although in cities people do wear a lot of 'inspired' clothing on the job, etc. But yes, mainly in the state - it would look quite out of place in the other areas.