Soooo terrible. There are a lots of people who suffering from this issue. I am wondering how long Microsoft refuses to fix this even that Minecraft have been bought for $2.5 billion USD. You are wasting this monies while have such bugs that prevents people to play.
Anyway I have a little info about the possible source of this problem. In my case the API endpoints producing timeout (30s) when accessing through the website (https://account.microsoft.com/services?ref=xboxme).
When performing these request via Postman, the server returns 503 Service Unavailable after about 35s.
TraceID: K7xHqrU/rESIP6jn.5.145
I don't know if this is DDoS attack or just internal issues of Microsoft account service but anyway this have to be solved.
P. S.: using VPN is useless in this case.
For now it works fine, thanks for fix. But for future, I suggest to show more informative error message in order not to confuse users. In current implementation it may looks like some problems there with a launcher ("Please restart your launcher"), but in fact, the problems is on Microsoft servers. My suggestion is to show different error message when the http status code is 503. Something like "We're sorry, there are some technical issues on our side. Please try again later. You can check Xbox services status here: https://support.xbox.com/en-US/xbox-live-status".