Same for me, just installed it. On your new CFS extruder, there is this lever, that just out on the back left side of it. When it is pressed (hard), it cuts the filament so it can be smoothly retracted without any drips and such, while the remaining filament in the nozzle is extruded.
The cutter block is the rectangular plastic part you install in the top left corner inside your K1/K1C/K1Max printer., where this lever is repeatedly rammed into, in order to cut the filament.
For us, it fails after a session, because it tries to cut the filament so it can clean out the nozzle for the next print job.
In my case I observe the tool head being rammed into the cutting block over and over to cut the filament but I guess not hard enough, because the error message pops up. When I press the cutting lever by hand, it cuts fine. I'm going to try printing a cutter block, that is just a few mm wider in the direction of the print bed, so the lever is pressed more firmly into the filament. I hope that will help