There are several unfortunate issues arising with the baked cloth sims in this game that have nothing to do with the lack of real time physics. Chief among them being cloaks and capes cutting into the floor during regular combat stances of several jobs, which is a result of cloth physics being simulated in a void rather than with a ground collider plane:
I have no idea why they thought that was a smart move, because characters mostly stand on the ground without a hole directly behind them.
I also want to raise the issue of capes generally looking pretty bad in this game due to shoddy cropping and bad alignments:
Add to that the general inability to combine most shields or greatswords with most actual armor due to insane clipping with shoulderplates (which with actual physics wouldn't be fixed, but instead break the WoL's back) - which along with Chakrams cutting into long (and therefore most) chest pieces in the game is an issue only Lalas, male Roes and male Hroths (who have a bunch of issues of their own) are close to immune to. Every other character model including male Midlander and catgirls are just not able to wear a significant amount of armor in this game without unnecessary amounts of clipping on jobs that should be made for wearing those types of armor. These and most clipping issues are not necessarily physics issues and often can't be satisfyingly fixed with better physics. They are the result of careless design.