The cloak Blaze is wearing is called "Druid's Cloak". It's an age old item, one of the first pieces of clothing we ever implemented, that I drew a long time ago when only the gods walked the earth. We implemented it because I wanted to look cool. I had no established methods for constructing game resources at the time, so It interacts poorly with most everything on the equipment screen. We haven't found a use for it -- yet, at least -- so it's not craftable. On map reset we gave one to all player's above 7.5 million learning points total. It does nothing.
The three recipients I know of are Rift, Blaze and Pumpkin, and I doubt that there are more.
Edit: Oh, and I have a full chest of them in Valhalla.
