This is an affectation based on French uniforms of the period. Until the 1870-71 Franco-Prussian War, U.S. regulations were based almost entirely on French models. The "ideal" tunic had a narrow, almost "wasp-waist", with padded pigeon-breast, wide full-cut sleeves, and a full, flaring skirt; this button placement serves to accentuate the cut. It's not just Federals or Croxton - compare him with well-known Confederate portraits like those of Beauregard, Bragg, and Joe Wheeler. This cut is one of the main flaws in nearly all reenactor reproductions.