Don't really disagree with you Melting Sky (wrt to need to balance rather than calling it a bug), but I'm thinking about my own cooking knives (which are high quality carbon steel, folded Japanese knives). Leather would be virtually impossible to get through, but I'm quite sure I can slash through any cloth you can throw at me (well, not adamantine ;-) ). It depends entirely on the blade length and the skill of the slash. If you watch a very good sashimi chef at work (which I often do ;-) ) they will place the back end of the knife on the fish and then pull backwards, slicing through the fish. They have some pretty big knives to deal with large fish (like as long as a long katana!). That will get you through an entire tuna, bones and all. But if you just press down on the knife (or hack at the fish), you won't even make it a quarter of the way through.
Because the fibres of cloth are easy to cut, you really just need enough blade length to get through the thickness (and strength is actually immaterial). So for instance, a katana really should have no problem getting through a bale of cloth (which will be thicker than anything an ogre is wearing). A kitchen knife would have no hope. It also depends greatly on the skill of the wielder. If you only hit with the tip of the blade, or you don't have the correct motion, or if you use too much strength, it's not going to cut. Also, if the cloth is thick enough, the wearer may have enough time to jam the blade (using friction on the sides to stop it from moving).
So in the end, I think you probably want to vary the degree of success by the length of the blade, and the skill of the wielder. But you should probably also allow some protective facility on armour skill as the cloth gets thicker.