Did the below suggestions fix your issue?
I've had the same error and neither clicking the underlined/marked text "Make Compositor Fullscreen" nor going into SteamVR --> Settings --> Developer and clicking "Enable Direct Mode" seems to work. It just reboots SteamVR and upon rebooting surfaces the same error.
SteamVR support page (https://help.steampowered.com/en/wizard/HelpWithGameIssue/?appid=250820&issueid=374&nodeid=79&return_nodeid=71) says to either Enable Direct Mode or update your GPU driver, but my GeForce driver says I have the latest version.
Any thoughts??