Are freyed collar and cuffs bad on a shirt? ?

Even a designer shirt won't look good with frayed anything. You'd be better off spending the money on a brand new, less expensive shirt.  However, you could take your shirt to a tailor and see if there's anything they can do with the frayed edges.  

It could be worn under a sweater if it covered the frayed parts.  Otherwise, just wear it around the house.  

You bought a shirt that had the cuffs and collar frayed? 

As soon as my husband’s dress shirts show signs of fraying or wear and tear or stains  I toss them out.  Not appropriate for a professional work situation. 

You have a flannel shirt you wear at home or running errands, I would still be wearing it with the cuffs frayed