Player 2 data/ progress not being saved

Playing on Xbox One with my partner, with hundreds of hours into a shared world connected to my primary Xbox account. Over the past few months we started running into an issue where Player 2 would spawn as a "new" character without inventory or XP on logging in to the game (logged in under her own Xbox account, not as a guest). This was generally fixed by quitting the game between play sessions.

Since version 1.16.1, this fix no longer works. When joining as Player 2 in split screen, there is only a blank "new" character. She has now lost her entire character - hundreds of hours worth of work in enchanted gear and XP. 

Multiple other bug reports and threads on this issue dating back to 2019. This is a major game-breaking bug for a lot of people! Where is the fix?!