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In ModusToolbox 2.1, if there are any stale GDB sessions, you might see this error. Please check the Debug tab for any stale sessions and clear them as shown below:
When you say the tool isn't able to detect the device, how does the device show up in the device manager?
Also, when you reconnect the device back, does everything work as expected? Did you try restarting ModusToolbox rather than your PC?
Looking forward to your reply
My problem seems to be computer system related. I am guessing that it could be due to the IT corporate policy causing this error.
It seems fine after I use a secondary computer to work on the development.