Unable to collaborate on a Numbers spreadsheet
The easiest way to fix this is to use the web app. (To triage and also buy time to sort out the failure)
Both you and your collaborator should sign in to https://www.icloud.com/numbers
This way, there can’t be any issues with local passwords, local version issues, account problems. Once you’re signed in to the servers at Apple data centers, you can open up your document and be sure the sharing is saved and live online.
Then track back one by one to isolate an issue on a specific device or specific local version of numbers.
Once you confirm the issue is the local user account you may need to remove your account and start over to test things further. It’s less likely a system issue, but erase install everything can sometimes work without needing to remove the iCloud keys from the keychain and re-establish identity on that Mac user account.
AppleCare might have insight if they can read the precise error message on server side and compare with your account error.