Another interpretation of avoiding "the appearance of evil", which I think has more of a Biblical foundation, is to avoid evil when it appears. If something is evil, then get away from it. God would rather we act rightly than simply "appear" to do the right thing.
The way I apply 1 Thess 5:22 is usually with regard to maintaining neutrality and objectivity. If you are a judge, a financial auditor, or if you sit on the Board of Directors of a company, there would be safeguards in place to manage potential conflicts of interest. In financial dealings, this is especially true with respect to transactions involving related parties.
It's hard to have a decent standard of living in a society where nobody trusts those in authority to behave ethically and to not abuse their positions to enrich themselves in inappropriate ways.
To provide an obvious example: suppose a board member loaned their company a sum of money at 25% interest. Also suppose this company's finances were such that it was generating positive cash flow and could have easily gotten that loan at a much lower rate of interest. What is the purpose of this loan? Why is the interest rate so high? How does this loan benefit anyone other than the lender?
The Karens are projecting. Although we should strive to be good witnesses, there isn't much we can do to prevent others from misreading and seeing evil where there is none. That's on them as it exists in their heads. It seems to me that people should feel free to salsa dance or whatever without the fear of being misjudged. Then again, if you can't do something without sinning then don't do it. Not because of how it might potentially appear to the faultfinders.
Speaking of which, I just looked up the term and stumbled across Jude 1:16
"These people are grumblers and faultfinders; they follow their own evil desires; they boast about themselves and flatter others for their own advantage."
There were times I would ask one of these Karens where the appearance of evil was. Most of the time they struggle to explain this in an objective manner and it's clear they are speaking out of their own personal bias. We all have our own biases - the test of character is how we manage these. I have a story about this in an online forum - I'll put it up later...
While there are times that sin may be present in nightclubs and other such places, it would not follow that these places are sinful per se. When I go to a nightclub or dance hall, I consider its overall vibe. Sin is going to have an adverse impact on the overall vibe of a place. You don't even have to be a believer to sense this adverse effect. You'll know it.
Some establishments are so trashy that you are all but presumed to be some kind of creep solely because you are male. That's just human nature: if a woman is approached by 10 creepy and inconsiderate guys before you approach her, she's going to have a barrier up.
Here in Cincinnati there are two Latin themed nightclubs that operate weekly. One has been in business for a while - it's an OK place if you go with people you know. A lot of people there just like to drink their drink and watch others dance - or only dance with people they already know. The other opened up recently - while they are open very late and have great food, there have been reports of fights and other security concerns. If the vibe is such that they are but one misunderstanding or slight provocation away from fists flying everywhere, something is very wrong.
The dance events held at a studio are the most ideal because people are there to dance. Sometimes I even drive to Columbus for dancing.
So the TLDR version: you can avoid environments where sin is pervasive simply by paying attention to the overall vibe.
