Hope this blog by Lesley Wright, aka englishcakelady, aka Royal Bakery, helps.
I think it's a pleat, not a ruffle. You can do it by cutting a long strip of fondant and then folding in half (lengthwise) then wrap it around the cake. I took a craftsy course (pleats, drapes, ruffles) and the teacher was showing how to get that look in a cake. Good luck!