Given the fact that Facebook, Instagram, and Threads appear to have logged everyone out, it seems that what has happened here is either Meta's server or a client-side security check has issued a signout command to all apps and devices, including on Quest headsets, so the headset thinks it needs to be set up again.
Edit: Meta Explains Why Quest Headsets Stopped Working, Vows To Make Them "More Resilient":
"Quest already works offline, but in this instance our login servers had a bug and were returning responses the headset didn’t expect which made the sessions invalid.
We’ll work to make it more resilient to this super rare condition."
Queue a few years when servers are shutdown and the perfectly fine hardware won’t function ally all.
Fuck Facebook
I wonder how many things will break without servers, especially things that don’t seem like they rely on one, but still do. Maybe simply because of shitty programming or unnecessary dependencies. Reminds me of this story: How one programmer broke the internet by deleting a tiny piece of code and this xkcd strip.
My guess is a whole lot more than anyone would assume.
Thing is more open to fuck with than my phone. I'm surprised it hasn't been completely jailbroken with custom OS's for it yet.