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You are correct that you have to delete the duplicate website and set up in the redirects in the htaccess file. Once you have done that I would fetch the home page and other top-level pages to force Google to crawl. This will help with removing the duplicate pages out of Google's index. Also, make sure they don't have a search console set up for the duplicate webiste with a submitted site map.

Thanks for your answers. I'll assume then that 'Internal Nofollow links' are included in the Links Overview report more for information, than as a factor that goes towards DA. I think I was confused because the competitors website had Internal Nofollow highlighted in green with a tick (see image in OP), that made me think it was included as a factor in DA.