Don't think that's the case. It probably works as Yuffie or Barret's. You have one or the other active. At least Cloud has been doin respectable, but no crazy damage for me. 
If that's the case, it would be a bit underwelming.
Red XIII can get a 50 points boost to BOTH attack and magic, for a total of 100 if I'm not mistaken, (or for a total of 50 between the two?).
If Cloud boosts don't stack, that means he can have at most a 25 boost to one stat. That's, at most, half of what Red XIII gets. Granted, I haven't recruited him yet, so I don't know how long it takes for him to reach those boosts. Maybe it takes so long he never does, I don't know, but even then, he still has his bonus from the beginning, right? Cloud's innate is a very late game unlock, so it would be a bit disappointing if it cannot be at least as powerful as the other ones...
Oh, btw, how does one apply the hotfixes when using the iro version? I don't think I will need them for a while considering the last fixes only apply to CD3. I bet the iro itself will be updated a couple of times before I reach that considering my free time, but still, would like to know.