In theory it could, but ...
Fractals are used to simulate natural phenomena, features that have been created by natural processes that act on wide range of scales. Why fractals work for simulation of these processes is because they apply a relatively simple rule recursively when generating finer detail, achieving the self-similarity characteristic for these phenomena.
With vegetation it works because the DNA sequences determine the growth of plant parts are often being applied recursively as well.
But with regards to man-made objects, the only area it would work well this way is when the objects are subjected to natural, recursively defined processes. For example, how the rust eats the metal
Adaptive tesselation can be viewed as a recursive subdivision of surfaces, so that you'd get smooth surfaces out of a rougher definition. It's probably too much of a generalization to call it a fractal process though, because there's practically nothing random about it.
Fractal processes can be still used here though, mainly with the use of procedural materials, and with procedural approach to applying dirt and rust.
Using it all with point clouds would be certainly possible, but it all needs someone who'd deeply focus on this area. Because as always, the ideas fly like angels, but the devil is down in the dirt with the details
