They can do, but not in all cases. I'm not really sold on the idea that cloth physics will improve gameplay. Any specific and practical examples?
Fer example, a cape flapping realistically in the breeze doesnt improve gameplay, but if it can cover your face blinding you (or an opponent if thrown) then it serves a purpose.
I just did... Visual indication of wind, if wind (and wetness) are multipliers of cold/hypothermia replacing FO3/FONV radiation. If that mechanic is in, the gameplay is improved by *having* capes to protect from these multipliers (not so much the visual aspect). However, making it physics based makes it easier to create, as you let physics deal with it rather than animation system. As a 3D modeler, sometimes we use physics as a modeling tool rather than the final render which shows nothing of the underlying physics that took place. This is probably how they do it already, but they have to do it for each armor type - one cape version for the smooth one, and one cape version for the spiky one, and a problem for addon user armor.
I really don't know, I'm not a TES modder, so I don't know the process. Just speculating.
So the gameplay aspect of having cloth physics, is the easiness and plausability of getting workable capes in the first place, as it draqes over anything rather than having to create unique sets for every combination. Plus it expands to hair, gowns, draqes, and banners etc.
Ok, cover your face... Sounds like fun and pain at the same time