I tried to read entire thread. but did not. so if I am repeating what one has said please forgive me.
My sons wore shorts till aboout age 7..
the melamdim then requested that they do not wear shorts because they might touch their legs during learning causing them to become ‘tumah’ and constantly request to leave the room to wash their hands.
as far as I know men/boys may walk around in their underwear. there is no issur of znius!
There are definitely other reasons that they do not dress in this way, ZNIUS is not one of them.