We had the same issue with new users added and impossible to update their permissions. We have about 11 - 12 users in total. Also one user that previously had permission to submit data was affected.
As it turned out, all usernames that were affected from “failed to update permissions” error started with “a”. Once we changed usernames to start with “b” we were able to set or update their permissions.
Hope this helps @comcat and @bridgethac.
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