It appears the Cloth tag doesn’t like objects that are being sub-divided and tears just like the morph tag.
I tried turning off all morphs and using the point cache tag. But if the sub-division is turned on, tearing is exactly the same as with morphs.
I tried using the point cache on the sub-division object, but it appears this tag only works on mesh objects.
I tried increasing the cloth sub-samples back up to 36, what only reduces the tearing but I noticed in the animation the cloth is not as fluid and looks “noisy”.
This issue can be reproduced with the same sample project sent yesterday.
There must be something we’re (or I’m) missing as can’t believe I’m the first to discover this.