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Windows Phone 8 - Error Code 86000C1C, Status is Access Denied

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I have been testing a few different MDM solutions (MaaS360 and Air-Watch) with Exchange 2013. I've been using a test user called test1 and a Nokia Lumia 625. I've been successfully testing solutions for a few weeks now. Today the device will no longer sync and gives me an error code of 86000C1C. When I look at the mobile device in the Exchange Admin Center, I can see that is has a status of "Access Denied". We have never blocked or quarantined devices (it's disabled - our ActiveSync is currently open). 

I've tried deleting the device from Exchange, performing a wipe of the Lumia 625, but no matter what the device will reappear in Exchange as "Access Denied". I've also tried clicking the "allow' button within the mobile device details. No luck.

So I created a second user called test2. I tried adding the account to the same Nokia Lumia 625 and it worked fine... The device was allowed. 

Why is this happening? Is there a limit to how many times a device can be activated for a specific user? The user test1 current;y only has one device associated. Is there an activation limit? 



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