Hi Akshay,
When running the Mendix modeler locally, you make use of the “free licence”, which means that you can have a limited number of concurrent sessions. I'm not exactly sure when a session will end when using a published REST operation, but I think that you hit that limit, as you speak about multi-threaded REST-calls. Probably you need to keep it at a maximum of 5 threads in parallel locally. When deploying to a licenced cloud node, this limitation is removed of course. You could verify if this is the case by logging in with another account and check the Mendix Console on this error:
Regards, Johan