hmmm, my laptop screen is kinda small and I can't enlarge the photo for some reason, but the ruffles look like buttercream to me...
The ruffles are buttercream made with a rose tip. Hold the tip fat end to the cake and "wave" it up and down and you will have ruffles.
The ruffles in that pic are b'cream - done with a special tip. It was originally part of a set from Argentina(?) but now I think you can get it from Wilton.
No reason you could not make them out of fondant but they will look somewhat different.
I think the cake is very cute. I don't care for that many ruffles but it is well done.
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