No. Cloth diapers do not cause hip dysplasia in babies or toddlers.
However cloth diapers that are bulkier than disposable diapers can make the hip dysplasia worse but it doesn't cause it.
Disposables are a better option for babies or toddlers who have hip dysplasia because disposable diapers are not as bulky and babies and toddlers can walk easier in the disposable diapers than they can in cloth diapers.
Although when the disposable diaper gets wet enough it gets bulkier between the babies or toddlers legs which can then give the cowboy walk or waddle.
That could then make it worse when it comes to the hip dysplasia.
However babies and toddlers need to wear diapers and there's no way around that unless they are potty trained.
But the diapers themselves do not cause the hip dysplasia but they can make it worse.