This is addressed in parallel thread below, but for completeness, this particular issue is caused by using an evaluation license, but not selecting the evaluation edition from Help > License Manager
https://community.arm.com/support-forums/f/armds-forum/52265/i-use-the-free-for-the-30-days-s-licence-ds2021-2-but-when-try-to-connect-fvp-for-debug-encounted-below-error