Quick answer: Unreal PhysicsHandle grabbing a skeletal mesh component disabling its cloth simulation? Grab disables physics for the held body - move cloth simulation to a child mesh.
Pickup a flag; cloth on the flag stops animating while held.
Cloth on child mesh
Primary body grabbed; cloth on a child mesh continues to simulate.
Or keep cloth physics on
SkelMesh->SetSimulatePhysics(true) on cloth bodies only; root grabbed.
Audit cloth interactions
Grab + cloth: design the lifecycle.
“Physics handle is body-level. Cloth lives in components.”
If your game has cloth on grabbed objects, the architecture is upfront design.