This is an error that sometimes occurs when a user tries to connect their PayPal account with your marketplace. This is not an error message regarding the marketplace account but from PayPal.
What is causing the error?
There can be several reasons that cause this error. For example:
email not confirmed
bank account not confirmed
phone number not confirmed
identity not confirmed
The reasons can also change from country to country, so it is good to check if there can be another reason for you
How do I know which reason it is, and how do I solve it?
First, you need to find out which is the reason behind the error. The best way to do this is to log into your PayPal account and check that all these are confirmed. In some cases, PayPal gives you instructions or notify you what you still need to set up.
If you cannot find the reason from within your Paypal account, you can go to PayPal's help center and search on the topic or contact PayPal support.