Crux of the issue is that the indices name generated are too long. @alex-adestech pointed out to me that this issue only sorted out in MongoDB 4.4 and not even MongoDB 4.2. Searching through the rocket.chat issue tracker I saw only person hit this and nobody replied. Search further, I found that Rocket.Chat doesn't even support MongoDB 4.2. The releases page mentions the versions they test with - https://github.com/RocketChat/Rocket.Chat/releases. This got me wondering why we hit this issue. Well, the answer it turns out is that Cloudron generates 32 byte mongodb database names for apps. This in turn ends up affecting the length of the index.
I have made a fix now for Cloudron 5.6 that generates shorter names. (We have had to do something similar for apps using MySQL as well in the past).