I have reached this error in both the portable and manual installation methods. I am have Python 3.11 installed, using TD 2023.11760.
I am able to load the engine into the dropdown menu in the TouchDifffusion component, but pulsing "load engine" does nothing. DAT ouput gives the error: "cannot access local variable 'pipe' where it is not associated with a value."
A previous user posted this same error, and upgrading the repository was suggested. I have tried that same suggestion with no change.