Sorry, this account is not active error on Registration in Membership

I was testing a new user signup, and on submit of Username, Email and passwords “sorry this account is not active” pops as an error.

(see screenshot)

http://www.healthshire.com/?attachment_id=22260

Interesting a message is sent to the admin account saying a new user registration however the username and email are EMPTY.

<begin sample email>

New user registration on your site HealthShire.com:

Username:

E-mail:

<end sample email>

In the back end the user is created in the WP users list, (set as subscriber) and also in the WPMUDEV membership, however the membership status is “inactive”

This happens both on free as well as paid accounts. Last successful registration we have had was on December 19th. I found the problem today, and the problem happened twice on Jan (only know because of the empty emails vs full emails)