There is now a way to make this item logical, and give it a background!
Truth is, it was created during the first boom period of the Chalice Bearers. The records do not make it clear, whether it was commissioned by the Maidens, or someone intending to replace them - it is only sure it was a costly failure. Making the viewers sad worked well, much better than desired in fact. Making the wearer feel bad was definitely not the plan.
Since then was the cloak safely stashed away somewhere... or maybe not. :) Go to Comment
You could say that it was harvested from the skin of the horrible Sadsack Demon of the Fourth Circle of Hell, and that all who look upon it are forced into visions of Will Ferrel in a too-small leprechaun outfit, dancing.
Even that would be better than a pointless curse, and it would be more original too. Go to Comment
The first comment that comes to mind is what would happen if the cloak was put on a dead body? Would that be enough to instigate the magic, or would it just be a magic cloak on a cadaver? Short and sweet too. Go to Comment
Certain trees have sap that is filled with magical potential. Their sap is harvested and distilled down to produce various types of potions, much like maple syrup is collected in some areas. The magical effects of these syrupy potions are often fairly trivial; perhaps they simply cause the imbiber to grow hair more quickly, summon butterflies, or walk a few inches above the floor. People enjoy the syrup as a flavoring, instead of imbibing it for its magical powers.