I use Character Creator 3 and iClone 7 for creation and export to UE4.26 and have had many similar issues to what you posted. And like you I’ve beat my head against the process repeatedly with mesh, material, physics, weight, etc., etc. all to no avail.
What I found is that some Reallusion generated assets behave like this and neither Reallusion nor the vendor that created them could figure out why. I tried everything posted and numerous other processes but life’s too short so I would finally find an asset that worked.
I found that the issue was more prevalent with loose clothing and was really bad with long hair so I just started using tighter clothes and shorter hair which I could live with. I spent many months on going back and forth with this issue but since I switched over to tighter clothes and shorter hair I don’t have any issues. And I tried a hell of of a lot of assets, both UE marketplace and RL.
Also, I found that the export/import settings could cause such issues to be even worse so post up your iClone/CC3 export settings and your CC3 mesh/material settings. Finally, did you mod the morphs on the character and/or coat?