I isolated the issue to be if a child has a some rotation already applied by default then the problem happends. I just removed the rotation to the child colliders and it worked fine but it does mean it it's going to be a hassle making compound colliders.

I encountered a similar issue when exporting from Blender. The export created an extra entity called "env_light" with an unsupported Dome Light component. To resolve the error, I simply deleted the "env_light" entity. When I imported the usdc file into RCP it also created an env_light entity that wasn't in the original scene.