you should be able to get the simulation working nicely in MD. It will be a process of adjusing the simulation settings, the resolution of the cloth, and also manually tugging and using the pins to grab and hold sections (iirc ctrl + w or something to grab and hold which gives a little locator you can move around). It is…
if you remove the bones, skin weight the hanging arm cloth 100% to hip or root (basically so that animation doesn't effect them), then use cloth paint tool in unreal, I think you should get a proper simulation. for getting correct scale in MD, that should be simple to solve especially since you do have one working example…