There are two possible reasons for why this error happens, described further below.
Your resolution is higher than Parsec supports
that the host's computer (the computer that is being connected to) has a resolution higher than Parsec supports (3840x2160), and it needs to be lowered for people to be able to connect. Follow this article for more details on how to change the resolution on Parsec.
Microsoft RDP issues
This can also be caused if Microsoft RDP is connected simultaneously. Please disconnect from Parsec and RDP, then reconnect via Parsec.