Thank you for posting in the community and this might be a limitation as those cloud assets are not typically shared from one workstation to another. I recommend you make a suggestion on the road-map to support network library folders for cloud libraries.
I just solved the issue and i believe it has to do with one’s own Windows security settings. The issue for this seems to be coming from Ransomware protection disabling access to Twinmotion from accessing the library on the computer. A setting called " Controlled Folder Access" in Windows security was blocking TM from accessing the local TM Documents folder and hence was not able to download or use the Megascans library locally. Im not sure how this came to be, but this solved the issue for me after i added the TM to the exclusion.