I ran into this issue today; ran through every solution I could think of like Windows updates, sfc/dism checks, changing DNS, deleting .minecraft, etc. I was able to get around it by using my hotspot and resolved my issues with every launcher (vanilla, Modrinth, Curseforge) - funnily enough MultiMC worked with no issues. Internet and cellular through AT&T.
Trust me if I was able to reproduce the issue I would have provided that information and potentially been able to tell you what to look at to resolve the issue. At this point, the behaviour seems random. One day it may work great all day but the next day may need to sign in to Microsoft. Another day it might be great for half the day. Other times it might work for several days and then need me to reauthenticate.
It seems you might have issues with an authentication API call timing out but not sure why it seems so random. Wishing you guys luck in fixing this but hopefully it doesn't take another year to fix.
After the previous updates, the Xbox can now see my worlds (Windows 10), however, after attempting to join the world, I get an error message "Unable to connect to world."
BUMP
I can also confirm that this is a bug. My friend has the same message popping up and we cannot connect to each other.
Wanted to follow up since I believe "I" found the issue. According to this Reddit post, Killer Control Center (KCC) was at fault. I've reinstalled Windows 10 and 11 and validated that it is installed by default which is why a fresh Windows install and only Minecraft fails. To fix this, you can disable the engine entirely by going to "Prioritization Engine" and toggling "Killer Prioritization Engine" off. I've tested the vanilla launcher and Modrinth and I'm no longer seeing any issues like before.
I'm surprised how much I had to dig to find this post, but hopefully for those of you who run into this issue can find either this comment or the Reddit post and resolve your issue.