On minecraft 1.20.1
(with fabric api installed)

"Mod resolution encountered an incompatible mod set!
A potential solution has been determined:
Install cloth-config2, any version.
Unmet dependency listing:
Mod 'Modern Beta Fabric' (modern_beta) 6.4.1+1.20 requires any version of cloth-config2, which is missing!"

Even after installing Cloth Config, the same error still occurs.

Did you download this particular mod? https://www.curseforge.com/minecraft/mc-mods/cloth-config