Cannot log in to Microsoft account on Nintendo Switch — Error Code “Drowned” after 1.21.120 update

After updating to 1.21.120, Minecraft on Nintendo Switch can no longer connect to a Microsoft account. When attempting to sign in, the game shows the message:
“We tried to sign you in to your Microsoft Account, but something went wrong. Error Code: Drowned.”

This occurs even after reinstalling the game, rebooting the console, and using the code-based login method at https://aka.ms/remoteconnect .
The account was previously working normally before the update.

Steps to Reproduce:

1. Launch Minecraft on Nintendo Switch.

2. Attempt to sign in with a Microsoft account.

3. The game displays the Drowned error message and fails to complete login.

Expected Result:

The game should successfully connect to the Microsoft account and sync purchased content and Realms data.

Actual Result:

The game fails to connect, always showing Error Code: Drowned. Reinstallation, clearing save data, unlinking/relinking the Microsoft account, and rebooting the system do not resolve the issue.

Additional Information:

• The Microsoft account logs in successfully on other devices (Windows, iPad).

• The issue began immediately after updating to version 1.21.120.

• Multiple users have reported identical behavior on the Microsoft Q&A forums and the Mojira issue tracker

• Appears to be a cross-platform authentication bug between Nintendo and Microsoft services.