This error indicates that there is too much activity occurring on the connected account, and so the request could not be serviced. Your app should wait the number of seconds indicated by the 'retry_after' value (5 seconds, in this case) before trying again. The simultaneous activity could be coming from your app itself, or elsewhere, e.g., from the the Dropbox desktop client or another app. It can come from the same user, or another member of a shared folder.
Also for reference, the cursors for /2/files/list_folder/continue are account-specific and encode information about that specific account. Depending on the account, if there is a lot of state to encode, the cursor can be large like this.