MDM - "ErrorCode": 12040 "ErrorDomain": "MCMDMErrorDomain", Please log in to your iTunes Store account

We are getting this on some devices but cannot figure out device state that leads to this response.

These are supervised devices. The App was originally installed using a configurator blueprint using a VPP account. The vast majority of devices change the App to managed with no prompt when one of the following MDM actions are sent, but some devices prompt for an apple id log and fail to make the app managed.

The prompt occurs with either an App install/update
{
"request_type": "InstallApplication",
"udid": "00008020-000561A00E68402E",
"identifier": "com.*.*.default",
"options": {
"purchase_method": 1
}
}
or with a request to make it managed
{
"request_type": "InstallApplication",
"udid": "00008020-000561A00E68402E",
"identifier": "com.*.*.default",
"change_management_state": "Managed"
}


in either case we receive the following
{
"CommandUUID": "d31ec100-dbbe-4801-9795-390b6b6503bf",
"ErrorChain": [
{
"ErrorCode": 12040,
"ErrorDomain": "MCMDMErrorDomain",
"LocalizedDescription": "Please log in to your iTunes Store account.",
"USEnglishDescription": "Please log in to your iTunes Store account."
}
],
"Status": "Error",
"UDID": "00008020-000561A00E68402E"
}

We are pretty certain no Apple ID was used locally. In some cases hitting cancel on the prompt allows the MDM on the next request in other cases we found the App must be removed locally on the device and then installed by the MDM. The App cannot be removed by the MDM since its not managed

Occurred on both iOS 13.7 & 14.4