VaTexAtlas plugin is designed to work with sprite sheet data exported from TexturePacker (https://www.codeandweb.com/texturepacker) in JSON Array data format.
It's important to use this configuration:
If you leave .json extension it will be imported to Unreal as Paper2D spritesheet.
Use default configuration for most cases - it's best choice for UI.
Use provided settings if you're making a game for mobile devices. It's right choice to have squared POT textures for them.
For desktop projects you can disable "Force squared" option.
Also, Scale option can be useful for different item icons, etc., where pixel-perfect resolution isn't necessary.