Display WordPress Post Widget does not work on Atomic sites from Customizer

#### Steps to reproduce the issue

Add the Display WordPress Posts Widget to an AT site via the Customizer (via Calypso) and try to add any WordPress.com blog to its settings.

Adding via WP Admin widgets screen works.

This issue does not occur on non-Atomic sites hosted on WordPress.com nor WordPress.org sites hosted elsewhere or even on Pressable.

Ticket: 642339-zd

Sites replicated on:
yesterdayenchantingtoday.blog
thatjetpacktest.blog

Site tested with (putting into the widget's "BlogURL":
19thct.com
And any other WordPress.com blog I've tried so far

#### What I expected

It is able to pull the post feed from a WordPress.com site

#### What happened instead

We get this error message:

"An error has occurred. Please reload the page and try again."

And the widget seems to time out possibly implying an issue with REST API (suggested by someone in #jpop-support )

Screenshot: