I stand corrected.
I bought a Pegasus Cloak and went into Velks. Clicked it and it worked fine.
I was under the impression that it was just like Live as I had gone in before with a Spirit of Eagle and had had it stripped from me when I zoned in.
That was because certain songs like SoE were outdoor only if i remember correctly. Or they were at one point. I think they removed it after to many people cried.