The way the launcher checks the licence of the user can fall into an edge case reguarding the Demo status
Pre-requesite: a user created a Mojang account before December 2020 but only purchased the game after that date
As of the current state of migration, that means the user's email is associated with a Demo Mojang account, and a paid Xbox account generated through minecraft.net
What is expected ? That the user has a choice between Microsoft or Mojang login, or at least that the "highest priority" takes over and the user is granted with a full Minecraft licence when starting up the launcher
What happens? The launcher says the game will launch in "demo mode" and redirect to minecraft.net to purchase the game, despite the fact that minecraft.net can give access to an account with the purchased game
On minecraft.net, two accounts with the same email is not a problem, because the website asks to the user if it should use the xbox.com or the mojang.com auth system
On the current version of the launcher, the login screen is "enter a password and your email, or in cases of Minecraft accounts, the username"
As a result, the launcher doesn't provide a way to specifically select between Microsoft and Mojang accounts on the first join
Workaround: connect to the launcher with the Demo account, then dismiss the alerts about being in Demo Mode. From there, the user can go into the Settings>Accounts menu, which then allows to connect specifically with a Microsoft account, which is not presented as an option when starting from a "not connected" state.
It is related to MCL-16570 as it is about a purchase being shown as a demo version
However, the different detail is that the Microsoft account and the Mojang account uses the same email
For the record, here's the fix from the linked ticket "Minecraft: Java Edition (purchase after December 1, 2020), sign in using your Microsoft Account."
But, as far as I can see, there is no way to sign in with a Microsoft Account when the Mojang account has the same email when not logged, it's only an option from the settings, which requires to be logged in, and that sounds like a legitimate usability issue (at least until the Migration process kicks in)