The Polyvinyl Alcohol plastic stiffener is already used in the garment industry, and can be recovered and reused. As Sewbo points out, machines already cut and measure fabric, but can't handle soft materials like cloth with much dexterity. With stiff fabrics, a bot could take the already-cut pieces and assemble them like sheet metal.
However, some vital steps appear to have been glossed over in the video (below). It's not clear how it would line up the seams, for instance -- that would likely take some kind of advanced machine vision system.
Sewbo's approach is novel, but it's not the first company to dream up an automated sewing system -- Electroloom, for one, wants to "3D print" garments. However, it's hard to see the benefit of automation when you can already buy a T-shirt for $5. And if such inventions did work, it could throw millions of garment industry workers, most of whom are women, out of work. However, Adidas is already using robots to build shoes, and so automated clothing production seems inevitable, too.