I am working on making a tool based on the nordicsemi python library that comes bundled with nrfutil. The tool performs various tasks that require communications from a DK central running the nRF Connect firmware, to a large number of BLE peripherals. This is an error code I was receiving a lot while developing my program:
I found that this error seems to arise if two software modules have an open connection to the DK central at the same time. For example, if I had an open J-Link connection to the board using the PyLink library, and then tried to use the nordicsemi library to discover peripheral devices at the same time. It also happened if I was doing something that called into nordicsemi, while a python subprocess was doing something that called nrfutil directly.
I hope this information will be useful to someone in the future who also encounters this error.