The issue here is that the system is over-constrained. The velocity sources force velocity at a node. The clutch (when locked) forces the velocities on its ports to be equal.
When the input velocities are equal and input pressure exceeds the threshold pressure, the clutch attempts to lock. The Simscape engine cannot reduce the network, as the values of the speeds are externally provided (through Simulink) and fails.
When the difference in input speeds is large enough, the clutch provides friction, but does not lock. This does not constrain the speed between its Base (B) and Follower (F) ports. When the speeds are equal but the input pressure is lower than the threshold, this works because the pressure is small enough that the clutch does not lock. This also does not constrain the speed between its B and F ports.
Physical shafts are usually provided with a torque, rather than an input velocity. Using torque instead of velocity sources as input, in combination with appropriate inertia blocks should reduce the overall constrains on the system.
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