Even though this question is solved by commenting a “drop if exists” but have this consideration.
You were trying to trying to sync a standby database using mysqldump from source.
So you executed mysqldump --all-databases --master-data.
Then you use the sql file thus generated on replica giving you error Access to system schema ‘mysql’ is rejected. ERROR 3552 (HY000) is a specific error code in MySQL that typically indicates an access restriction or permission issue related to system schemas.
This hints that the SQL being executed are using user with not-enough-privileges?! Are you using user with limited privileges?
Thanks,
K