The Rules of War do not require you to wear a uniform 24 hours a day, seven days a week if you are not, at the time, actually engaged in combat. If so, any U.S. off-duty soldier captured while on liberty or in a rear recreation area in civilian clothes or buck naked in a shower could be denied POW status with a legal excuse to back it up.
That's not a good precedent to establish.
The Hague Convention codified the qualifications for belligerent rights as follows:
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REGULATIONS RESPECTING THE LAWS AND CUSTOMS OF WAR ON LAND
SECTION I
ON BELLIGERENTS
CHAPTER I
The Qualifications of Belligerents
Article 1.
The laws, rights, and duties of war apply not only to armies, but also to militia and volunteer corps fulfilling the following conditions:
To be commanded by a person responsible for his subordinates;
To have a fixed distinctive emblem recognizable at a distance;
To carry arms openly; and
To conduct their operations in accordance with the laws and customs of war.
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In the first point, Saddam is in the clear. He is the leader.
However, if Saddam is connected to any car bombing where the driver posed as a civilian or in any bombing that attacked civilian targets, such as the Red Cross compound, then Saddam would have violated some or all of the last three conditions for qualification as a legal combatant with POW rights.