Hi history-growth,
A clean cut is perhaps more challenging than a chaotic tear. I'm not pretending that I have done it with the new Cloth in any production. So, my example follows the parameters and how to supply the information to the system—my best result from last night's exploration.
You are guessing correctly; the path of points and the combination with the Linear field is the key. I explored if more considerable distances or shorter ones 90º to the cut are better.
I find Dynamics/Simulations undoubtedly intriguing but more challenging to art direct. Sometimes I use the results of the dynamic (point cached) to harvest certain states and then use them as "Blend-Shapes" in a Pose Morph. This is a nice balance between the two qualities.
All the best