It is being reported across by many Windows Phone users around the globe, that after flashing their handset using Windows Device Recovery Tool downgraded to an earlier version of software, are facing issues while setting up their device with a Microsoft Account.
A reddit user reportedly came up with a warning sign, saying there is a repeated prompt of “we can’t connect at the moment. wait for a little while and try again” or ”we are really sorry, but we’ve run into a problem, and we are not sure what caused it. this might be a temporary issue that will be fixed if you try again later, but if you keep seeing this error and want to call support, here’s an error code that might help them figure out the problem. 0x80048264” appearing every time when trying to sign in, and even with the correct time zone / date+time or MSA credentials.
It appears the sign in bug is also hitting Windows 10 Mobile (along with Windows Phone 8.1) users who had hard reset their device using the familiar settings found under about >> reset your phone, which has led huge disappointment among the Windows Phone users and rendered devices useless.
The problem appears to be from the server side, and Microsoft has yet to come up with an official response in this regard.
You can follow up this thread on the community forums and we will also keep you updated, once Microsoft has something to say about the same.