Hi there, your picture of the finished outfit looks great !
I knitted 2 of these for my 2 grandsons, one not adding the
extra stitch and one of them adding it.
Both turned out just fine (too).
I did write King Cole and inquired about the
extra stitch, they replied saying that you need the extra
stitch to give you an odd no. of sts to follow the moss stitch pattern.
Thinking about this made sense, since both legs only have
21 sts each giving you a total of only 42 sts and this is
an even number. Besides, after adding this extra stitch,
you actually end up decreasing it later on.
Either way you do this pattern, it seems to work out,
so happy knitting !