This error message can be see when trying to add a user to a 'Security Group' .
Note especially, "Non-Google accounts cannot be added to Security groups "
See https://support.google.com/groups/thread/244268117?hl=en&msgid=244843083
It is no longer possible to directly add non-Google accounts to a Google Group. See this help centre article.
"Non-Google accounts—You can invite but can’t directly add users without a Google Account to groups ending in @googlegroups.com."
Note that this refers to Google Accounts not just gmail accounts - a common source of confusion. See my article about Google Accounts
You can use the same add-member dialog in Groups, but you need to send invites instead. Once the email address recipient accepts your invite, they will get added to your Group.
Sometimes invited users report getting the following error message:
"Unfortunately, you were unable to join the group. The following error occured: Unknown server error -- Please try again later. Make sure you are attempting to join the group with the same account that received the group invitation. If you have continue to have problems, please contact the group owner."
This is a common scenario is where an invitation email from the group is forwarded to a gmail account or other email address that does have a Google account and the default browser opens defaulted to that Google account. Then the link to the Google Group tries to open in a browser with a logged in Google account.
As to why this change was made, I can only speculate. I believe the rationale would go something like this:
Users of Google Accounts can prevent their accounts being directly added to a Google group by an account-based setting. Prior to this change, those with email addresses with no associated Google account had no way of preventing their email address being directly added without their permission. This could allow spammers to add their email addresses to groups for spamming purposes. (Indeed, there have been a lot of users complaining about exactly that). This change prevents that from happening.
One possible reason for getting the error message:
"Unfortunately, you were unable to join the group.
The following error occurred:
Unknown server error -- Please try again later
Make sure you are attempting to join the group with the same account that received the group invitation.
If you continue to have problems, please contact the group owner. "
is if you are using a Google Workspace account where the domain settings prevent joining external Google Groups.