The hosts collapsed to 20 for six – the first time any side had lost six wickets in the first five overs of a one-day international – after being sent into bat in overcast conditions and on a green-tinged pitch at 'the home of cricket'.
South Africa's pacemen duly cashed in, with Kagiso Rabada (four for 39 in nine overs) and Wayne Parnell (three for 43 in eight) running through the top order.
Jonny Bairstow's battling 51 helped England recover to 153 all out, a target that provided few problems for South Africa, who made 156 for three.
England still won the three-match series 2-1.
Morgan, asked if this result on his Middlesex home ground had dented Champions Trophy hosts England's confidence ahead of their latest bid to win a maiden major global 50-over title, said: "I'd like to think it doesn't.
"Obviously what cost us was that first hour - a lot of live, green grass on the wicket, but ultimately I thought South Africa bowled beautifully."
The former Ireland batsman added: "We didn't play too aggressively - a lot of our shots were defensive - so a lot of credit goes to South Africa."
Test wicket-keeper Bairstow is still struggling to nail down a permanent place in England's ODI side, despite some impressive recent batting displays in white-ball cricket.
England coach Trevor Bayliss accepted the Yorkshireman could force his way in come the Champions Trophy, telling Sky Sports: "He's doing everything he possibly can do. He's putting a lot of pressure on, and that's what we want."
The Australian added: "It'll be an interesting selection meeting."
England face Bangladesh in the opening match of the Champions Trophy across London at The Oval on Thursday.
The venue is the Surrey home ground of England opener Jason Roy, currently struggling for runs.
But Morgan indicated Roy would remain at the top of the order for the clash with the Tigers, despite Bairstow's fine form.
"He (Bairstow) never lets us down – every time he comes in, he scores runs, and he continues to bang on the door," said Morgan.
"It's the hardest thing telling Jonny he's not playing and he's done nothing wrong."
Morgan, however, added: "As regards selection, Jason is our number one pick at the moment.
"He and (Alex) Hales have been very important to the way we've played as a team for quite a long time."
Morgan said he did not expect to encounter a similarly bowler-friendly pitch at any of the three Champions Trophy venues – The Oval, Edgbaston and Cardiff.
"I'd be disappointed if we did, because any team (would have) the potential to win or lose a game on a toss in a major tournament – which is hard to take."
England rested a trio of first-choice all-rounders from Monday's game in Ben Stokes, Chris Woakes and Moeen Ali, with Morgan expecting all three to feature against Bangladesh.
"We're very confident," he said.
For South Africa, top of the International Cricket Council ODI rankings, this was a timely victory.
"We're pretty happy with the way things have panned out for us," said coach Russell Domingo.
"We knew conditions were in favour of the bowlers... and you've got a chance against England, because they play that expansive brand of cricket."
Rabada, meanwhile, was optimistic about the Proteas' Champions Trophy chances.
"Why not? We've got really good players, amazing talent and some experience as well," he said.