The Red Cape is the result of a human being whose Hiruko has grown to the point it can assume control of the host body. Those afflicted to such a degree have the Hiruko extend fleshy appendages which envelop the victim to the point it seems to be wreathed in a red cape, hence the name. The transformation included enhanced strength, speed and the ability to fire a potent light attack from the mouth.
Denpachi Iida and Kiyoshi Daidouji both were afflicted with strong Hiruko, which forced the transformation upon them both. Raidou Kuzunoha the XIV managed to defeat Denpachi and release him from the curse, but the Hiruko Daidouji carried grew further to full maturity and eventually left his body.
Shin Megami Tensei: Devil Summoner: Raidou Kuzunoha vs. King AbaddonEdit
"A human transformed by a Hiruko's larval form. They're named for the red membrane covering their back. In this form they gain inhuman strength, but their anxiety remains and feeds the larval Hiruko."