Collision physics seem like something they reeeeally don't wanna do. My only other suggestion is what if they just had like a separate model for the hair to have it tucked into gear that it would otherwise clip through? The same principle as what they do with hats and hairstyles that the hat would go over (Mostly the ponytails and twintails.)

And while some might not like the fact their long, flowy hair isn't sticking out it's at least better than the clipping. Although this method might not solve the hairstyles that have parts on the front that clip with some gear. (Like their new hime cut for all races.)