I have the sense that "offspring" will return in Part 2. There's no way most traditional players would have stuck around Midgar in OG to max their materia. Someone else can tell me how long that grind would last.

So it makes sense storywise that the ability to clone materia would go completely unknown to the characters (hell, the scriptors could argue it was the Arbitors that kept the materia in check too, because plot).

Open world is not a place for sporadic restrictions. Unless they actually plan to handle that part differently.