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."
So glad I bought an Index and have never given Meta any of my money or data. The first time I learned of Facebook, was an article which explained how Zuckerberg called his first "users" dumb fucks for giving him their info for free. This must've been in late 2005 somewhere. Never needed another "lesson" on why social media is balls and should be avoided at all costs.