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I think you probably misinterpreted the error message, it simply lists this as one of the reasons as to why Wallpaper Engine is not able to work with Steam. It's more likely that you are running some sort of antivirus or firewall software which is blocking Wallpaper Engine / Steam from communicating with each other or the Steam servers.
Check this FAQ entry for additional information:
https://steamcommunity.com/app/431960/discussions/2/1354868867716411258/