It really is broken, and if you don't think it is, you're either a MK player that can't win without it, or you're just really dumb....
OK, just to clarify, I hardly ever use the cape at all, and when I do, it's usually as a surprise tactic or an alternate recovery.
Admittedly, I'm not a professional or high-level tournament player, but I'm competent enough to give a good fight.
I'm not dumb, but I will admit that I might be defending a technique I don't understand fully.
To my understanding, there are three major applications of the cape:
1. As an approach: The one I use most often, because yes, it is an invisible, unpredictable movement. However, the startup frames provide NO invincibility. I've been hit out of the start of this move by... well, lots of stuff. Very useful, but not any moreso than, say, Pikachu's Quick Attack Cancel.
2. As an attack: Yes it's an instantaneous attack that comes from nowhere. But if it misses or is shielded, the lag is retardedly punishable. Again, useful, but not broken.
3. As a ledgestall: The one I believe we're talking about. If I understand correctly, this involves edge-grabbing, letting go, then immediately caping to grab the edge again, providing a continuous, nigh-invulnerable edgehog. I acknowledge this is very useful, and can be used to stall infinitely. However, to do this for any length of time is both difficult and tiring (though not impossible). Also, there is a certain amount of risk involved. If you mess up even once or if someone else manages to get a ledge grab, you pretty much are doomed to fall to your death.
If I'm misunderstanding anything, please clarify and I'll gladly own up to being misinformed. And, as I stated in my first post, if this technique
does get abused to the point of being broken, I fully agree that it should be banned. MK players shouldn't need to rely on a stall technique.