I am and have been seeing this same issue with login using the Simulator. If it helps, I think the issue is that Apple's two factor authentication is failing. When I try to log in on device and compare it to the Simulator, I am getting the notification to allow on my other trusted devices. I think this is the source of the problem. I enter the 6 digit code from another device and I am signed in. However, when trying this from the Simulator, it stopped working in the iOS 14 betas.
I did file an issue with Apple in the Feedback tool with repro steps but never heard back.