I’m having the same issue and noticed a very weird behavior.
Duplicated vertices is definitely not causing it for me and merging vertices in Blender doesn’t help.
Initially my skirt from Marvelous Designer has these materials assigned:
When I leave everything like it is, applying cloth data in UE works.
I noticed that when I delete all these materials and just create one, because I only need one for Substance Painter, then I get the degenerate triangle error.
I don’t get it. If I leave the initial materials apply cloth data works. And the mesh has over 2000 duplicated vertices.