"We couldn't connect to Microsoft family right now, so your family on this device might not be up to date. "

this worked for me https://aka.ms/familyverify need to verify device first.

“We couldn’t connect to Microsoft family right now, so your family on - Microsoft Community

This works!!!!

I'm having the same issue on my Surface Pro running Win11. I can add my kids' accounts as users but it won't see them as part of my family or let me connect the device to their profile in Family.

I called Microsoft and had one of their engineers connected to my laptop. The issue was resolved. My issue was only for the new laptop, the old laptop worked fine and I had Family Safety up and running for a while > 1.5 years. He removed old laptop under devices, tried something (not very clear) to add my new laptop, added my old laptop back to Family Safety. Then asked me to wait for 24 hours and assured me the problem will be solved.

I waited for about 1~2 hours and found out the new laptop was added as a second device.

Not sure this can help anyone but you could try to call MS to ask for help.

I am having this issue after doing a clean installation of Windows 10. I tried removing my computer from devices. The way I was able to re-add it was to switch to a local account then convert it back to a Microsoft account. But this did not solve the issue for me. Do you remember how your new laptop was added?
I contacted MS via chat, but they were not able to solve the issue and said that this was likely an emerging issue.

Same here. fresh new install with windows 11. Impossible to set parameters from the local pc...

Same here, and I found that this problem is around since 2016, it's insane!