@Jaganljpmail
Apologies for the delay. The cause of it is usually lacking WVD, which means the session meets the max limitation.
FAQ 1: Is there any method to check the records of session usage ?
Yes the Azure Portal's WVD page can display the current sessions:
FAQ 2: Is 'idle/ disconnect' being counted in the 'MaxSessionLimit' being configured in the wvd host pool ?
Yes all active, disconnected, idled sessions will be counted into the sessions. (Idled session is one kind of active sessions. Being idle for too long may get the session disconnected.)
Only the user sessions which were "logged off" will not be taking the session counts.
So please make sure all the active and disconnected sessions are below the max limitation. Otherwise the users will get the mentioned error when trying to connect to WVD.
Hope that helps.
----------
Please accept an answer if correct. Original posters help the community find answers faster by identifying the correct answer.