The message is quite literal - it means your parts are slightly out of tolerance, and by raising the absolute tolerance by a factor of 2, it managed to do… something. However, when you can’t do anything else with the object after, it means that something was not all that great. Sometimes it leaves you with a non-manifold object, that is to say there are one or more surfaces “stuck” inside the model that shouldn’t be there, because of the bad operation. Sometimes the edges are simply too far out of tolerance to be useful.
I wrote the above without looking at your file first. Now I will look. OK, it is the second problem. It made a valid closed polysurface, but the edges are out of tolerance. If you explode the object and rebuild the edges, then try to re-join, it will leave you with naked edges here (4):
They are out of tolerance by 0.06 which is a lot, considering the file tolerance is 0.001.
I suspect that your objects weren’t completely coplanar when you tried to union them.