Okay, after more fooling around, the tools in the Fitting Room, along with the morph brushes, are becoming more familiar. I've had this outfit in my runtime for years, but haven't been able to get it to fit this character. Though it took me about an hour to make this work, I've managed to fit the garment and save it to the figure.

For the morph brushes, it's key to loosen GENTLY around the breasts until there appears to be a fold between them. The smoothing tool will flatten this out so that the garment doesn't look like a "second skin" on the figure.

One thing that may be helpful, is that for clothing props designed for V4 fitted to scaled characters like this one (she's 92% of a full sized V4), don't try to pre-fit the clothing. If you simply go to the Fitting Room and have it set the prop and the figure to zero, it'll prefit and tighten without difficulty and won't translate the prop on the y-axis.

I've found that's NOT the case for V3 items, though . . .