On the topic of Tail Hiding

[SturmChurro]

And it's not believable that they can tuck it into their pants perhaps?
Or is it more believable that it's ghosting through their equipment instead?

Here's an alternative: instead of playing a race with beast features, one can play a race without these, and avoid clipping. Tails, Au Ra horns, viera ears (select pieces), etc.. but I digress.

It's more believable that their pants would accommodate their tail, and they wouldn't just tuck it in, and be incredibly uncomfortable - especially many of the au ra tails. So, yeah, it clipping makes more sense. It shouldn't clip through capes, but instead the cape should have physics, the game just doesn't have that. It's a compromise.