Translation:Does the invisibility cloak exist?
We don't usually say "invisibility cloak". We say "cloak of invisibility," don't We? I knew what the sentence meant but was hesitant to answer anything except "invisible".
As a fan of fantasy games I'd say they're both generally acceptable. Some other examples:
It's a stylistic choice in the end, oftentimes it's [noun item] + [item of noun]