[Solved] Verticles exposes out of mesh problem

Hi.
1). The mesh is not vertex painted with 00FF00, it will not morph. You can also paint the skirt-like bottom with 3FFF00 and smooth the transition between colors
2). UVs are in the area meant for bottoms and shoes. Not only there will be texture overlap, but you are also not utilizing the space that is actually meant for tops.

I suggest you to never put uvs in that extra space in the bottom right corner unless you absolutely have to BECAUSE EVERYONE DOES, which leads to texture overlap.
If you place your uvs like this, you won't spend much time editing textures ( once you're done with uvs, UVs - Export uv layout, use this image as a guide)

If you place them like this, you'll get the most out of it. Bigger uv islands = better quality. But you will have to change the placement of almost all uv islands in the texture

3). You should transfer the uv_1 map with these settings

4). What you import in the package should have the same vertex groups as what you cloned. This goes for every meshgroup. When this is not the case, you might get distortions. If you won't, someone else using your cc might.
Your mesh is long enough to be affected by thigh vertex groups. No maxis top is. If you will transfer weights from a top that does not have them, the mesh will not animate properly in that area. If you will transfer weights from a full-body outfit that has them but clone a top and import your blend there, there might be distortions.
In these cases we clone a full-body outfit, transfer weights from it, import the mesh back, and change the category to top.
So you should clone cfBody_TowelPlush_CAS and transfer weights from it, then import the blend file in it.
5). Was the mesh originally in a different position? The armpit area is messed up a bit. It's best to change the position of the rig, apply as rest pose, transfer weights from it, then go back to the right pose again, and change the rest pose again
6). There were loose vertices. Finish mesh editing by selecting everything with A and Mesh - Clean up - Delete loose
7). About the initial issue you came with, in the shoulder area the uvs or the textures should be adjusted. About that rectangular thing in the chest area, not actually sure what it is, i see no split edges or overlapping there. It is no longer present, so I guess it got removed somehow in the process

New blend and package

1). No, vertex paint is the reason the mesh does not morph. Your issue is usually caused by overlapping geometry or split edges, but I found neither of those, so not sure what was that
2). Excuse my ranting, but, god, I wish some people would just not make tutorials before learning how to fix all their mistakes first, like, this is such a common mistake and it isn't even hard to figure out, yet so many people who make these tutorials make it, every second newbie puts their uvs in the same place and runs to share their cc with other people, and you end up with CAS full of clothing with uvs in the same place, like, GOD, why don't they ever explain anything. Anyway, no, you are the master of your uvs, they will look the way you want. Just scale them uniformly and rotate by 90/180/270 degrees instead of freeform so that you would not loose quality while editing textures
7). Okay, so, interesting thing. I opened the same package and changed nothing, yet there are no lines at all. We're using the same version of s4s

5). Yeah, that you must change.

I am not sure what is causing those "vertices peeking out", now i am not sure that those are vertices at all, must be some rendering issue? Try in in CAS

Literally no idea what can be the cause of it. Maybe try different skintones or saving textures in a different format?
If you've been using png so far, export the same diffuse texture as dds, then check if anything is wrong with it, including alpha channel, if not, just re-import it in s4s to see if it will change anything.
Just in case, these are the setting you should be saving dds images with

guess we're going to have to wait until someone who might know what is causing it chimes in