Okay, so I made sure all the figure's translations were at 0. Did the same with hip.

Then fitted the clothing item to the figure as close as I could.

Went into the Fitting room again, fitting the item, created a figure. Went back to the Pose room and conformed the new item. This is what I got this time:

 

 

So, at least it's "on" the figure this time, but still not conforming at all.