If you are using a test app, this error will appear if the Instagram account you are trying to auth doesn't have a role with the App. For my purposes, giving the account the "Instagram Tester" Role via the Facebook Developer console (developers.facebook.com) allowed me to test token exchange in my test apps without granting those accounts elevated permissions they didn't need.
Under "App Roles" / "Roles", click "Add People"
Select "Instagram Tester" then enter the handle of the account you want to auth
The invite can be accepted under the "Tester Invites" tab at https://www.instagram.com/accounts/manage_access/