Looks good. No issues.
For comparison, Dungeons & Dragons 3.5 has at least two options for this:
The dueling cloak (Dragon #335 77) (15 gp; 3 lbs.)—proficiency with which is granted by the feat Armor Proficiency (light) (Player's Handbook 89) and similar class features—is normally worn but can be readied like a shield so as to occupy a hand then grant the bearer a +1 shield bonus to AC. When so readied, the dueling cloak imposes a -1 armor check penalty and 10% arcane spell failure. The dueling cloak can be used as a weapon, but it can be used only to make disarm attempts yet with a +2 bonus. A dueling cloak can be masterwork and that has its normal effect; it can't be made magical like a shield.
The exotic shield gnome battle cloak (Races of Stone 158) (5 gp; 1 lb.)—proficiency with which is granted by the feat Exotic Shield Proficiency (gnome battle cloak) (RS 139)—seems to take many of its cues from the dueling cloak, but it's also pretty much just better: +1 shield bonus to AC, no armor check penalty, 0% arcane spell failure, make disarm attempts with it with a +4 bonus, and make it magical like a shield. Only a proficient user can make disarm attempts with the gnome battle cloak—and that, it seems, is the only benefit of proficiency.
However, this DM is actually partial to your table's solution: "Dude, just call the dueling cape a buckler and be done, all right?" That's elegant and avoids a lot of issues that come from trying to put into game terms this relatively simple idea. (For instance, the It's-a-buckler-and-move-on! solution eliminates the question of whether making the dueling cape magical requires the feat Craft Magic Arms and Armor or the feat Craft Wondrous Item.)
Keep in mind that if Monteverdi's using a dueling cape and insults the honor of someone using an actual buckler, he's liable to be insulted right back as he's using an honorless shield, just one of a different material. Further, if Monteverdi refuses to use a shield because he, personally, sees no honor in using a shield, he might need to A) take a history class, and B) somehow become immune to arrows. Some weathered oldtimer's going to tell him, "There is no loss of honor in bearing a shield, young man, but there is a loss of life for not bearing one!" However, if his antishield bias is shared by his culture, it'll probably take another culture to change Monteverdi's mind about shields, and, until that happens, Monteverdi can carry his ersatz buckler with pride, knowing that he's using a dueling cape and not using one of those—ew!—shields.