Try this instead:
= FORMAT(SUM('Sheet1'[Duration]), "hh:mm:ss")
If the duration can cover more than 24 hours, then you may need to handle days separately. Something like this:
Format Duration (d.hh:mm:ss) =
VAR TotalDuration = SUM ( 'Sheet1'[Duration] )
VAR TotalDays = TRUNC ( TotalDuration )
VAR HrMinSec = FORMAT ( TotalDuration - TotalDays, "hh:mm:ss" )
RETURN
TotalDays & "." & HrMinSec
To keep everything in hours:
Format Duration =
VAR TotalDuration = SUM ( 'Sheet1'[Duration] )
VAR TotalHours = TRUNC ( 24 * TotalDuration )
VAR MinSec = FORMAT ( TotalDuration - TotalHours / 24, "nn:ss" )
RETURN
TotalHours & ":" & MinSec