If I properly understand, C is the parent repo that has Xlinks pointing to repos A and B.
I'm able to create some cloaking rules in the C repo applied to the Xlinked content. I can do it via GUI --> right-click --> Add to the cloaked list.
Then, If I create a new clean workspace pointing to C and before updating, I copy my previous "cloaked.conf", these files are not downloaded to the workspace. Remember that these cloaking rules apply to Xlinked content.
In summary, I'm not able to reproduce your issue. Are you using the Windows Plastic GUI? Could you attach some screenshots and your "cloaked.conf"?