Hey khafezrightclicker,
I ran some tests yesterday just to make sure matinee could record cloth simulation. I was able to record a simply flag waving in the wind, and I will show you how I was able to do so. In your active perspective viewport click on your ‘Matinee’ actor which has the cinematic you wish to record.
Within the ‘Details’ panel you can check the ‘Play on Level Load’ which will kick off your cinematic as soon as you hit PIE. Use this checkbox in conjunction with the ‘Create a Movie’ option within your matinee actor to record your cinematic as intended.
Use the images below as reference on where to find the option within your Matinee actor, as well as the additional options when you open the window for recording.
Play on Level Load
The option to record on level load.
Create a Movie
Movie Options
Here you are given options on how you would like to render out your cinematic. One thing to keep in mind when the cinematic is complete, is you will be returned to your player character, or the default player start location and the matinee will still be recording. Simply bring up the console command at this point and type quit, which will exit PIE.
Let me know if you still need help or if the suggestions resolved your issue.
Cheers,