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If you have this error, it will usually occur upon joining localhost. This is a trickier issue that we cannot guarantee that you’ll solve, although the following can fix this issue:
  • Restarting Lilith
  • Restarting Minecraft
These methods personally worked for me when I had this issue, although since this is a Microsoft authentication issue, this might vary. We cannot solve the problem if the above methods do not work immediately, so please just keep trying them out over the course of several days to a week. If this has been a persistent issue for more than a week, please make a ticket and let us know.