Repro:

Try to create member group in a project record whose BU is not root BU, we will see below error.

Root cause:

The Dynamics team was created, however it failed when trying to add user into the team.
The team has Project User role

However the service account doesn't have enough permission to cover Project User's privileges cross BU.

Mitigation:

Grant System Customizer role to "Microsoft Portfolios" service account