The main issue with this sort of design is of course how the sleeves function.
Rendering them with proper cloth physics is significant computing power (Heck, we rarely see proper hair physics for the same reason) and without that they will clip horribly with many things.
It was passable in older games that had less overall movement so the issue didn't crop up as much, if at all. But these days, we have all sorts of active animations (With Larian even using motion-capture to properly render it)
At this point, Larian doesn't even implement cloaks very well, both in terms of them being more "Cape" than "Cloak" as well as a complete lack of physics involved with them (Which is why they clip through tails...). So I'd question if they'd be willing to properly code these sorts of sleeves...
So while they are certainly an interesting look... I'm not sure how likely they are to appear in modern games.
