We are currently experiencing issues on our server that are causing a 401 (invalid credentials) response to go out, incorrectly. We are currently investigating the cause of the issue, and hope to have it resolved as soon as possible.
As a workaround for the moment, this appears to be happening for basic authentication users who do not have pre-emptive authentication turned on. If you turn pre-emptive authentication on, the error should not occur.
Thank you for your patience while we resolve this issue.