Offline mode is nonfunctional in the released version 1.42. Prior to the latest release offline mode WAS functional in version 1.41.
If the internet is off (for whatever reason) we receive a window with a no internet connection message (as we did before the update) but we also see a persistent "Fatal Error Dash Encountered a fatal Error" popup and are asked to hit any button to try again which results in a loop with the Fatal Error popup. Trying to launch the library window results in the same error with no library displayed, just a blank window with the no internet message and the constant Fatal Error popup.
I too have the same problem, if i connect to the internet everything is working but once i disconnect and go offline i get the same error as mentioned above.
Apparently the PTC (beta) version 1.43 fixes this issue. You can opt in to the test channel or wait an unknown amount of time for the next version 1.43 general release.
i5 6600k - GTX1060 - 8GB RAM - Rift CV1 + 3 Sensors - 1 minor problem Dear Oculus, If it ain't broke, don't fix it, please.