Not really sure if this is a bug, but it's pretty unsightly:

Could be fixed by maybe repositioning the cape when the backpack is worn, or perhaps having exclusive backpack designs for capes analogously to elytra.

absolutely still exists in 1.18:

I strongly doubt this issue is outdated.

Hello! Quark's moved to 1.18 now-- unfortunately, this means that (unless your bug is critical and/or game-breaking), we're closing support for issues filed for versions prior to it (e.g. Quark on 1.16).

If your issue still occurs on 1.18, or if your issue happens to be rather critical (e.g. consistently crashing the game with no other mods present), please leave another note or open a new issue. Thanks for your cooperation!

Not sure how we could fix this one

BetterStorage just got rid of capes when backpacks were equipped, I'm not sure if this is a desirable solution though. There are some other options I've thought of:

• cape-themed backpack designs, like what is done with the elytra
• position the cape "under" the backpack and stop it from moving in the wind as the player moves
• position the cape "over" the backpack and have its default position/angle be adjusted accordingly to not intersect the backpack at its lowest point

All four solutions could even be implemented and made configurable through the skin options menu.

Maybe you could recolor the backpack when the player has a cape, like with elytra.