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I think I want to make a guess.
The Cloaked Stranger is Balbanes, he has been resurrected(or is a ghost) and brought all 5 of them together to defeat some massive evil. During chapter 2 he will appear and join the party for 3-4 story battles but will only be useable in those story battles. He will then start teaching ramza the beginning steps of becoming a heavenly knight. Heavenly knight skills will not be learned with JP but by completing milestones etc. After said 3-4 story fights, he will be destroyed by the evil they warned him about.
The Cloaked Stranger is Balbanes, he has been resurrected(or is a ghost) and brought all 5 of them together to defeat some massive evil. During chapter 2 he will appear and join the party for 3-4 story battles but will only be useable in those story battles. He will then start teaching ramza the beginning steps of becoming a heavenly knight. Heavenly knight skills will not be learned with JP but by completing milestones etc. After said 3-4 story fights, he will be destroyed by the evil they warned him about.