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."
I hope there will be a new law against this. Consumer devices should be functional even without access to Internet, apart from features that inherently requires Internet of course.
Meta Explains Why Quest Headsets Stopped Working, Vows To Make Them "More Resilient":
My bs meter is becoming more resilient.