@Geoffrey, Yes. I understand all of that. It used to be that when you spawn or join, Minecraft would find the closest 2-high set of airblocks above you (if you're in solid blocks) and place you there. This no longer happens, and IMO, is the cause of the issue. SSP is SMP (well, it is basically now).
And besides, a group of people could be landscaping where you are standing. And instead of standing in a plains biome, you are now suffocating inside a mountain. 😉 No malicious intent at all.
I'm pretty sure this is related to the spawn/join protection being removed (or reimplemented in a different fashion?). If someone fills an area with stone (for example) while you are offline, then when you join, you will be in the blocks and taking suffocation damage. If the old join code were added back in, I'm pretty sure it would completely resolve this issue (and make logoutivators possible again, but some people like that part!).
I would also like to report this same sort of issue. When I tried to install it to my 18 TB game drive (S, not C) I got this same error. However, when I removed the settings file at `%appdata%/.minecraft/launcher_settings.json` and went to reinstall again (pointing to the same directory), it magically started working. I will admit that in my case, I had copied my .minecraft folder from an old windows install (before windows died on me) and the install location had been set to `C:/Program Files (x86)/Minecraft Dungeons/game` (which is write-protected on my new drive). Could it be possible be that a device ID mismatch is throwing a permissions error? I don't know if removing the launcher_settings.json will fix the OP's problem or not, but it did for me.
Edit: while it looked like it started to install the game, it did not appear to do so. Resuming investigation.
Edit 2: Looks like restarting the launcher after changing the path and failing to install, worked.