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.”