My error doesn't look like that, but I am getting what I think is a very similar kind of error:
I am running Windows 11 logged into Windows with my Microsoft account, and I have confirmed that account *is* the one tied to my GamePass account. That GamePass account is the account logged into the XBox PC client in which I'm launching Grounded. So, all the Microsoft identity bits on my end seem correct -- I'm wondering, given your error @0wolfman0, if the problem is in whatever underlying SSO is happening between Obsidian and MS's systems.
I have not been able to fix this so far. I have tried doing a repair on the install, and I have confirmed that launching other games in the same XBox PC client on the same PC works just fine. All local network and internet connectivity appears in order. I logged into these forums to write this post using Microsoft auth, so some SSO is working between Obsidian and Microsoft, but whatever the Grounded client itself may not be (assuming it's separate).
Obsidian/Grounded Support, haaalp!