The behavior described happens when Chaos Cloth plugin has not been enabled for your Unreal project. You should therefore first make sure that Chaos Cloth is enabled.
You can see a sign that Chaos Cloth is not enabled in the Clothing Window under the section Config/Cloth Configs there are “0 Map elements”. If Chaos Cloth had been enabled you would see it list 2 elements here: ChaosClothConfig and ChaosClothSharedSimConfig.