Problem
New install of Multipass VM (https://multipass.run/) on macOS Catalina 10.15.7.
$ multipass mount <path_to_host_dir> <vm name>:<path_to_vm_dir>
> mount failed: source "<path_to_dir>" is not readable
Solution
Full access needs to be granted to Multipass via the macOS system preferences.
System Preferences > Security & Privacy > Privacy