This is a fabric formation effect made with Blender Geometrynodes. This uses a static mesh as an input, and distributes thread particles that dynamically scale in proximity to a chosen location. The shader is the same for both the thread object and shirt, but it can be separated.

To copy the effect, select your custom object, then the modifier object. Press Ctrl+L and click ‘Copy Modifiers’ in the opened menu, which will copy the effect.

Be sure to also copy the shader.

Please note this is a geometry nodes modifier, not an addon.

*This will only work in Blender 3.4 or higher*