Yeah I remember this glitch, and it's how I earned a ton of gold back in the day as it was really quite simple to pull off, by selling each colored robe for 1-5mil each on GL. Pretty scummy way to earn gold but I was a wee lad, and it wasn't a common occurrence that a player could have 20-50mil in the bank at that time.
I don't really remember how to do the glitch step-by-step but I know it involved holding the hooded robe as you walked through a moongate, maybe two moongates if I remember right. I also remember that they turned them into monk robes pretty quickly so not many really knew about it until the damage was done. Not all robes were turned into monk robes for some reason though. I still have one stashed away that's dyable and it simply says "A Hooded Robe". I'd show you but I'm done for awhile and let my sub run out so I can't log back in yet. It's just hard for me to justify spending $14 bucks a month when there's barely any new content or reason to play. I'll return as an EJ player soon enough.