Whenever XBOX attempts to connect to its servers and is unsuccessful, it blocks you from using features like chat, hosting a world, joining a world, or connecting to Minecraft Realms. It apparently thinks your account has some blocks or parental controls when really it just can't connect to its servers. This usually happens when you're connected to a school or work WiFi that has some sites blocked.

This error has occurred ever since XBOX was implemented into Minecraft.

NOTE: My account has no restrictions set up