1/ Be sure to work on a poly editable geometry with quads because the end of the process will mess the topology, so better start with good basics.
Add a Turbosmooth to your cloth piece to subdivide it with quads.
2/ Apply a Volume select modifier, choose stack selection by Vertex, Selection method set to “add” and select by “Surface” then “Texture Map”. Load the map you lovely painted in your favourite paint software. Here white areas in the texture will select the vertices.
3/ If you need more definition in the volume selection, you can go back on the Turbosmooth modifier and increase the iterations until you get enough details without killing your computer.
6/ Go on sub level selection “Element”, select the main piece of the mesh then invert the selection to get all the flying parts of the mesh selected and delete them.
7/ Because we can’t handle so much geometry (we’re in 2014 only) add a ProOptimizer modifier, be sure to check “Protect Borders” and the 3 Material and Uvs options.
Then click on Calculate and go make some tea.
8/ In my scene a value of 5% of vertex was correct to get less geometry with still enough details for the main shape
Actually the torn edges are flat, you can add another vol.select on top of the final mesh, with the same map you used for the vertex selection in step 2/, then add a mesh select, get the selection from stack, turn on soft selection, use a noise modifier on top… You get the idea 😉
(You may skip steps 7 and 8 by using GoZ and make a Zremesher of the cape)
As soon as you’ll add the relax modifier in step 9/ you’re Uvs will be stretched so it might be a good idea to adjust the unwrapping with some Zbrush magic (UV master: lazy people solution).
In the end I used that workflow for an animated cape blowing in the wind and it worked great.
Here is the video of the process explained in that post: