I think this is a red herring. There is an issue where an optional Git integration feature causes this error message:
but Arduino IDE still works fine in this case. You just can't use the Git integration feature, which doesn't have anything to do with the true Arduino sketch functionality of the IDE.
I think this is the error message to focus on:
Communication with the Arduino CLI helper tool, which handles all non-GUI related tasks for Arduino IDE 2.x, is done over a gRPC interface. So if a gRPC client can't be created then Arduino IDE can't do anything.
Note that there is a typo in this error message. It should say "Could not create client for gRPC.". I submitted a fix for that yesterday:
I'm not sure what is causing this problem with the gRPC client creation. I will bring it up with the developers at our meeting Monday to see if they can give me some pointers for troubleshooting this sort of issue. I'm finding that this complete change in the IDE technology means that some of the techniques that served me well with the classic IDE are no longer relevant.