How could a neutron star collapse into a black hole? White dwarfs usually do not collapse, as they have electron degeneracy pressure due to the Pauli exclusion principle. However, if one accretes mass beyond the Chandrasekhar limit, it is energetically favorable for the electrons to combine with protons and form neutrons. This gives us a neutron star.

However, neutron stars usually do not collapse into black holes due to neutron degeneracy pressure. How is it possible that beyond the LOV limit, the Pauli exclusion principle no longer prevents the collapse? Shouldn't it still prevent neutrons, which are fermions, from being compressed together any further?

I've seen answers involving quark stars, but those are purely hypothetical. What is the most accepted explanation for this?
The scenario you describe may occur. On the other hand it may actually be that neutronisation in a white dwarf is the trigger for a thermonuclear type Ia supernova.

You may be misunderstanding the Pauli Exclusion Principle (PEP).The PEP states that no two fermions can occupy the same quantum state, not that they cannot occupy the same space or be compressed to whatever density you like. The quantum states here consist of two spin states for every possible momentum state. In a degenerate gas, all these states are filled up to the Fermi energy. All that happens when the neutron star gets smaller (or collapses), is that the Fermi energy just keeps increasing as the neutron density climbs, and the neutron degeneracy pressure just keeps increasing as a consequence.

However, in General Relativity, pressure (like mass/energy) is a source of gravitational curvature and actually increases the required pressure gradient needed to support the star. At a certain threshold radius - a small factor larger than the Schwarzschild radius, a point of instability is reached where increasing the pressure is actually counter-productive.  Beyond this, you can make the pressure as large as you like and it will not prevent the formation of a black hole.

Even inside the BH there is not necessarily a problem with the PEP. You can compress fermions to infinite density so long as they can have infinite momentum.