We have three PCs and two laptops in our home, with two adults and two children all part of a "Family" and on shared Office 365 subscription. Both adults (administrators) get this message when logging into any of the devices, and one of our children always gets a message to say that the account needs setting up properly and therefore cannot report on usage. I've followed all instructions regarding setting the child accounts up properly, and all is set as suggested by Microsoft, but still getting error messages. I've tried switching off all child features (screen time limits, reporting, etc.) but still getting same error messages. Also still getting pointless weekly "report" emails saying it can't report because something wrong in account setup, even though I have switched off the email report feature.
This "Family" feature actually worked when first introduced back in Windows 8 but over time it has gradually broken down to the point where I have effectively switched all features off, and we still all get plagued with these error messages on boot up and weekly emails telling us there is a problem. I have reported it to Microsoft through the Feedback Hub with detailed description, logs and screenshots, and never once had a response from them.
If it were not for the Office 265 subscription, I would probably delete all accounts and start them again without the "family" setup. I've long since given up hope of a fix from Microsoft. They are just not very interested.