Actually, it hasn’t been fixed. The issue isn’t just Cloth related. It is physics related in general. Cloth, hair, Niagara particles, physics actors, etc… Cloth certainly performs differently now though in 5.2, but still unexpectedly if using TAA.
ho bad news
I am surprised that over two years later this is still a problem. Physics simulation with movie render queue and temporal sampling just does not work at all. Apparently, there are no work arounds either 
I did hear from a developer on Linkedin couple months ago. They are pretty aware of all these issues. The difficulty has been transforming Unreal into VFX software, while preserving its efficiency as a game engine first and foremost. Which is understandable.
Their recommendation is to cache as many effects as you can, especially as they continue to roll out the ability to cache physics elements in the engine when it comes to TAA. They are going to continue to update features and fix things like this in time.
Baking the physics before they go through TAA definitely seems like the way to go here. In the meantime, using time dilation and comping the motion blur manually in Nuke is working ok.
Thank you do much! This fixed it completely.
Responding late, but since this is top search result it might be of help:
i found that the issue was the Movie Render processes run the physics at a lower frame rate and that breaks it. You need to enable physics substepping in project settings and set the values such that they’ll play well with yoiur output framerate. This helps the engine fill in physics between the frames so it doesnt break. (fixed my issue on unreal 5.5.4)
For those finding this thread later… what you need to do in Sequencer is go to the Frame Rate setting in the Sequencer toolbar, select “Advanced” and set the Delta tick time to whatever your frame rate is. By default (for me rendering at 24FPS) it’s set to 24000, which means it’s trying to tick a crazy number of times on each frame. I set mine to 24 and it stopped all the crazy physics issues.