Ok so I seem to have found a repro on another Macbook, a 13" M2 from 2022. But it's quite weird.
I had an Apple Arcade subscription on my company Apple account. Our game was launching fine on Mac when installing from Testflight.
I let the subscription expire.
Today when launching the Testflight version, instead of the game booting, I was redirected on the subscription page for Apple Arcade on the App Store. This is the first weirdness. The game was simply not launching. I am not supposed to have an active Apple Arcade subscription to play a Testflight Apple Arcade game.
After renewing my Apple Arcade subscription, the game was no longer booting, and looking at the console, I saw OP's error,
Unable to relaunch due to error: Error Domain=ASDErrorDomain Code=506 "Launching too fast, throttling request" UserInfo={NSDebugDescription=Launching too fast, throttling request}
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Hi there, we're also having the issue on only one device, a 13" Macbook Pro M1. This is the only device this happens on. Do you have any updates?