We frown upon people trying to pass cloth off as known coded items in the game (cloth desc'd and named as a WJF Enforcer II, for example) or, indeed, people trying to pass cloth of as anything -other- than what it is meant to be. However, 'cloth' is not cloth… if that makes any sense. It's an item that we actively encourage players to make into -anything- that will facilitate RP. Power tools, 2x4, all those little nick-nacks you might want to use to assist whatever little escapade your character is currently undertaking. Basically two common sense rules apply to cloth. Firstly, do -not- abuse it. Abuse is basically covered above, trying to pass it off as something it's not. Other players should not be conned into paying exhorbitant prices for it thinking it's a coded object. However, it's quite acceptable for players to pay exhorbitant prices for it in the understanding of what it OOCly is with an agreed IC value. eg My character is an artist, I paint a portrait, make the required object out of cloth then sell it to the highest bidder.
Second rule is basically a simple warning. "Let the buyer beware.". If in doubt, 'examine <object>' will quickly and clearly identify wether the object you're looking at is 'just cloth'.
We're -very- wary of recycling any clothing we find on account of the fact that in many cases a player has put a -vast- amount of creative effort into their wardrobe and may have just 'misplaced' the clothing through clone-death. It's not unheard of for malicious players to destroy the clothing of their slain victim by clearing all the message props, an act of pure OOC destruction. Generally, if an item of cloth has all it's message props set and finds it's way into admin hands, we pass it back into the game for players to do with as they see fit. If it's incomplete, we recycle it.
And that's about the end of that.