Using QGIS3.10, I have tried Distance Matrix and NNJoin (distance results 0 - 10.32 for both, likely in degrees). I have 93 points of 2 types in one shapefile. I have the same distance issue if the points are in 2 files. UTM projections are problematic in this region because the study area spans at least 2 and often 3 UTM zones (e.g., x: -63 to -78). The CRS is WGS84 (EPSG: 4326). The points (caribou locations) fall into 3 clusters 150-300 km apart, but one point is in a central position between the 3 clusters and it is about 154 km from its nearest neighbor (i.e., QGIS's Measure Line tool readily provides km for WGS84).
How could I resolve this to get nearest neighbor distances in km?