SOLVED
Two Things had to change.
1- In the python script itself, I removed the "def" line. and declared the arguments as follows:
arg1= sys.argv[1]
arg2= sys.argv[2]
arg3= sys.argv[3]
Please note that sys.argv[0] is the file name.
2- Then, in MATLAB I declared the arguments
arg1= '"string1"'
arg2= '"string2"'
arg3= '"string3"'
3- Then executed the command
system(['"C:\Program Files\ParaView 5.8.0-Windows-Python3.7-msvc2015-64bit\bin\pvpython.exe" "C:\ path\fileName.py" ', arg1,' ', arg2,' ', arg3])
Note: The quotations and double quotations had to be used in this way. Otherwise, the system either did not recognize the paths or did not understand you have arguments, in which case I did not even get an error because matlab considered the script had run successfully, but the script returned no results.
Hope this is useful!