to invest: can you invest in luxury items that you know will lose value?

One dictionary has a supplementary definition:

[no object] (invest in) informal
buy (a relatively expensive product) whose usefulness will repay the cost

While their usage example is faintly ridiculous, that definition fits your hiking boots or dining suite admirably. An expensive pair of boots which lasts for several thousand miles is a far better investment than a pair at half the price which breaks at the end of the street.

That is, although what you have invested in will almost certainly depreciate, it depreciates at a far lower rate than other possible investment objects.

And of course, if you had invested in an E-type Jaguar in 1962, you would now be vindicated against the nay-sayers!

When one invests in an item, such as in your examples, one expects a return on that investment- It doesn't have to be monetary.

Investing in a good pair of hiking boots will save your feet from blistering on long hikes. After coming back from such a hike, one might well say, "Wow, those boots were a good investment."

I would think that a bad investment, even a known bad investment, is still an investment.

Even a bad investment can be better than the alternative of making no investment at all, when one's options are limited. In this case the investor is simply trying to mitigate his or her losses. For example, it may be the case that investing in a car will not actually produce any profit, but it will be a lot less expensive than relying on alternative means of transportation.

Furthermore, in the example of luxury goods, one is most likely investing in more than simple monetary gain. An expensive coat may bring status and / or happiness that would be harder to obtain otherwise.